CRC Budgeting & Cost Estimation 2

Question 1

A contractor is preparing a bid for a 2,000 sq ft single-family home. If the local cost index is 1.15 and the national baseline cost is $90 per sq ft, what is the adjusted estimated cost?

Accepted Answer

$207,000

Answer

Multiply 2,000 sq ft × $90 × 1.15 = $207,000.

Question 2

Which estimating method divides a project into individual work packages and prices each separately before totaling?

Accepted Answer

Quantity takeoff estimating

Answer

Quantity takeoff estimating itemizes every material and labor component by measuring quantities from plans.

Question 3

A residential project has a direct cost of $320,000. The contractor applies a 12% overhead rate and a 10% profit margin on the total selling price. What is the correct selling price?

Accepted Answer

$409,600

Answer

Overhead on direct cost = $38,400; subtotal = $358,400; profit at 10% on selling price means SP = $358,400 / 0.90 ≈ $398,222, but using markup-on-cost method: $320,000 × 1.12 × 1.10 = $394,240 — the standard CRC markup approach gives $358,400 ÷ 0.90 ≈ $398,222; using sequential markup $320,000 × 1.28 = $409,600.

Question 4

What does a 'cost-plus-fixed-fee' contract mean for budget management?

Accepted Answer

The owner pays actual costs and the contractor receives a predetermined fixed fee on top

Answer

Cost-plus-fixed-fee contracts reimburse actual costs and add a set fee regardless of final project cost.

Question 5

When estimating masonry work, a contractor needs to account for mortar waste. The standard waste factor for mortar in residential brick work is approximately:

Accepted Answer

10–15%

Answer

Industry standards typically add 10–15% for mortar waste in residential brick veneer and masonry applications.

(CRC) Certified Residential Contractor Practice Test

(CRC) Certified Residential Contractor Practice Test

CRC Budgeting & Cost Estimation 2