6. Budgeting Flashcards
Project Budget
the amount of money the owner is willing to spend to design and complete a project
When is the budget determined?
before the work is started
What comprises the budget?
base estimate + contingency
Who determines the cost of performing design tasks and producing contract documents?
the designer
Who determines the cost of labour, materials and equipment?
the contractor
Bid Price
a detailed estimate prepared by the contractor based on the detailed design
Indexing
a way of developing present and future cost and price estimates from historical data
Power Sizing Technique
used for developing capital investment estimates for industrial plants and equipment
Parametric Estimating
using unit costs from company records/pricing manual to estimate the total cost of a project based on measurable items (weight, volume, power)
What does an economic feasibility study include?
- capital recovery
- payback period
- rate of return
- benefit/cost
True or False: the budget should be facilitated by a WBS
True
What are 4 methods for calculating the compensation for design work?
- fixed price
- salary cost times a multiplier (usually 2 or 3)
- cost plus fixed payment (usually 10-25%)
- percent of construction costs (usually 5-12%)
When is the final cost estimate completed?
when the project design is complete
Direct Costs
costs directly attributed to the individual work task
What are examples of indirect costs?
overhead costs, management costs, insurance, etc.
