Cost Estimation & Budgeting Flashcards

Which document type provides the MOST detailed cost breakdown for residential construction bidding?

Answer: Detailed quantity takeoff estimate

A detailed quantity takeoff estimate itemizes every material and labor component based on completed construction documents.

A contractor estimates lumber costs at $8,500 but the actual cost comes in at $9,775. What is the cost variance percentage?

Answer: 15%

Variance = ($9,775 - $8,500) ÷ $8,500 = $1,275 ÷ $8,500 = 15%.

When estimating exterior painting costs, which factor most significantly affects labor productivity calculations?

Answer: Surface texture and condition

Surface texture and condition directly impact how quickly painters can work and how much material is needed per square foot.

A subcontractor's quote expires in 30 days, but project start is 90 days away. What is the BEST way to handle this in the bid?

Answer: Include an escalation clause in the contract

An escalation clause protects the contractor by allowing price adjustments if material or labor costs rise before project start.

In residential cost estimating, 'burden rate' refers to:

Answer: Employer-paid taxes and benefits added to base labor wages

Burden rate includes FICA, workers' compensation, unemployment insurance, and benefits that the employer pays on top of base wages.

A remodel project has $45,000 in materials and $30,000 in labor. The contractor wants a 15% gross profit margin on the total job cost. What should the selling price be?

Answer: $88,235.29

Total cost = $75,000; Selling price = $75,000 ÷ (1 - 0.15) = $75,000 ÷ 0.85 = $88,235.29.

Which cost category is considered 'indirect' in residential construction project budgeting?

Answer: Project superintendent salary

Indirect costs like supervision, insurance, and temporary facilities support the project but cannot be attributed to a single work item.