CRC Cost Estimation & Budgeting 3 — Questions and Answers
Question 1: Which document type provides the MOST detailed cost breakdown for residential construction bidding?
- Conceptual estimate
- Schematic estimate
- Detailed quantity takeoff estimate (Correct answer)
- Parametric estimate
Correct answer: Detailed quantity takeoff estimate
A detailed quantity takeoff estimate itemizes every material and labor component based on completed construction documents.
Question 2: A contractor estimates lumber costs at $8,500 but the actual cost comes in at $9,775. What is the cost variance percentage?
- 10%
- 12.5%
- 15% (Correct answer)
- 17.5%
Correct answer: 15%
Variance = ($9,775 - $8,500) ÷ $8,500 = $1,275 ÷ $8,500 = 15%.
Question 3: When estimating exterior painting costs, which factor most significantly affects labor productivity calculations?
- Paint brand selection
- Surface texture and condition (Correct answer)
- Homeowner's color preference
- Time of year the bid is submitted
Correct 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.
Question 4: 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?
- Use the quote as-is and absorb any price increases
- Include an escalation clause in the contract (Correct answer)
- Reject the subcontractor's bid entirely
- Reduce the subcontractor's quoted price by 10% as a buffer
Correct 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.
Question 5: In residential cost estimating, 'burden rate' refers to:
- The cost of heavy equipment rentals
- Employer-paid taxes and benefits added to base labor wages (Correct answer)
- The weight load calculations for structural elements
- Permit and inspection fees
Correct 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.
Question 6: 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?
- $86,250
- $87,058.82
- $88,235.29 (Correct answer)
- $90,000
Correct answer: $88,235.29
Total cost = $75,000; Selling price = $75,000 ÷ (1 - 0.15) = $75,000 ÷ 0.85 = $88,235.29.
Question 7: Which cost category is considered 'indirect' in residential construction project budgeting?
- Framing lumber
- Concrete for foundation
- Project superintendent salary (Correct answer)
- Electrical rough-in materials
Correct answer: Project superintendent salary
Indirect costs like supervision, insurance, and temporary facilities support the project but cannot be attributed to a single work item.
CRC Cost Estimation & Budgeting 3
Which document type provides the MOST detailed cost breakdown for residential construction bidding?