Construction Management Cost Estimating & Financial Management

Question 1

Which level of cost estimate is typically used at the conceptual design phase and carries an accuracy range of -30% to +50%?

Accepted Answer

Order-of-magnitude estimate

Answer

An order-of-magnitude (Class 5) estimate is prepared with minimal design information and is used for feasibility screening, carrying wide accuracy ranges.

Question 2

The difference between a contractor's direct costs and the project bid price is commonly referred to as:

Accepted Answer

Markup

Answer

Markup is the percentage added to direct costs to cover general overhead, profit, and contingency, resulting in the final bid price.

Question 3

General overhead (sometimes called home office overhead) typically includes costs such as:

Accepted Answer

Office rent, executive salaries, and accounting staff

Answer

General overhead covers company-wide expenses not tied to a single project, such as corporate office costs, management salaries, and administrative functions.

Question 4

A quantity takeoff in construction estimating refers to:

Accepted Answer

Measuring and counting all materials and work items from drawings and specs

Answer

A quantity takeoff is the systematic process of measuring, counting, and listing all quantities of work from contract documents as the foundation for pricing.

Question 5

Which cost estimating method calculates costs by multiplying measured quantities by unit prices?

Accepted Answer

Unit price estimating

Answer

Unit price estimating applies a cost per unit of measure (e.g., $/CY of concrete, $/SF of drywall) to the measured quantity to arrive at a total cost.

Construction Management Practice Test

Construction Management Practice Test

Construction Management Cost Estimating & Financial Management