CRC Cost Estimation & Budgeting 2

Question 1

A contractor uses the 'square foot method' for a preliminary cost estimate. What is the PRIMARY limitation of this approach?

Accepted Answer

It ignores local labor and material cost variations

Answer

The square foot method uses average costs that may not reflect local market conditions for labor and materials.

Question 2

When preparing a bid, a contractor determines that subcontractor quotes represent 60% of total project cost. If subcontractor costs increase 10%, what is the overall project cost increase?

Accepted Answer

6%

Answer

A 10% increase on 60% of costs equals 6% total project cost increase (0.10 × 0.60 = 0.06).

Question 3

A homeowner requests a change order to upgrade flooring after the contract is signed. The contractor should price this change order based on:

Accepted Answer

Current market prices at time of change order

Answer

Change orders should reflect current market prices since material and labor costs may have changed since the original bid.

Question 4

Which contingency percentage is most commonly used in residential construction budgets for unforeseen conditions?

Accepted Answer

5-10%

Answer

A 5-10% contingency is standard in residential construction to cover unforeseen conditions and minor scope changes.

Question 5

An estimator calculates that a roofing job requires 2,400 sq ft of shingles. Accounting for a 10% waste factor, how many squares should be ordered?

Accepted Answer

26.4 squares

Answer

2,400 sq ft ÷ 100 = 24 squares, plus 10% waste = 24 × 1.10 = 26.4 squares.

(CRC) Certified Residential Contractor Practice Test

(CRC) Certified Residential Contractor Practice Test

CRC Cost Estimation & Budgeting 2