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1 Builders (Exam Review for Business Law) > Estimating (Overview) > Flashcards

Estimating (Overview) Flashcards

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1
Q

Temporary storage facilities, dumpsters and utilities are considered _________ overhead.

a: Company
b: Project
c: Indirect
d: None of the above

A

b: Project

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2
Q

Indirect labor costs like taxes and insurance are sometimes referred to as ______________________________.

a: Labor Burden
b: Cost of doing business
c: Payroll expenses
d: All of the above

A

a: Labor Burden

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3
Q

True or False. A contractor should not only consider the costs of equipment needed to build the project, whether owned or rented, but also the operating/maintenance expenses, repair of, storage, delivery, finance cost, insurance, and taxes.

A

True

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4
Q

When adding profit to an estimate, the value is usually ___________________________.

a: A flat fee
b: A percentage of the total job cost
c: 30%
d: 25%

A

b: A percentage of the total job cost

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5
Q

What are the first steps in completing an estimate?

a: Review project documents
b: Conduct environmental assessments
c: Inspect the job site
d: All of the above

A

d: All of the above

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6
Q

True or False. Unit price estimates consist of assigning costs to each separate unit (task) of construction.

A

True

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7
Q

A complete list of all of the materials and items of work that would be required to complete a project are ______________________________________________.

a: Material and time data sheets
b: Quantity surveys (take off)
c: Labor and material break downs
d: Shopping lists

A

b: Quantity surveys (take off)

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8
Q

True or False It is always wise to choose the subcontractor who provides the lowest bid.

A

False

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9
Q

What would be the best source to use when estimating job site overhead?

a: Overhead site survey
b: Local lumber company
c: Historical job site overhead costs records
d: None of the above

A

c: Historical job site overhead costs records

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10
Q

Recognizing that delays are inevitable, the schedule should plan for this by considering ____________________.

a: Contingency time
b: Float time
c: Extra time
d: None of the above

A

a: Contingency time

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11
Q

____________ can be added into an estimate to cover unexpected expenses.

a: Contingency costs
b: Float costs
c: Extra costs
d: Overhead costs

A

a: Contingency costs

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12
Q

Besides the actual cost of the materials themselves, what other cost must a builder recognize as being a material cost?

a: Delivery cost
b: Material inspection
c: Storage
d: All of the above

A

d: All of the above

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13
Q

______________________are reasonable estimates of funds set aside for a particular item in a project (such as lighting fixtures). The contractor is not held to that price.

a: Budget overrides
b: Allowances
c: Budget tolerance expectancies
d: All of the above

A

b: Allowances

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14
Q

The basic hourly wage incurred while an employee is being productive in the building process is known as ______________________________________.

a: Direct labor cost
b: Scale
c: Reasonable wage
d: Overtime

A

a: Direct labor cost

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15
Q

An advantage to renting equipment can be __________ .

a: Short term need
b: Distant job location
c: No maintenance costs
d: All of the above

A

d: All of the above

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16
Q

This is a form of construction estimating in which a fixed price is given for the entire project.

a: Square foot method
b: Lump sum method
c: Unit price estimate
d: Line item estimate

A

b: Lump sum method

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17
Q

Typical industry markup is _____%.

a: 10
b: 15
c: 18
d: 20

A

b: 15

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18
Q

The cost of having employees includes their hourly wage and other expenses not included in their wage such as, matching the employees social security and medicare contributions, unemployment and workers compensation expenses. These additional costs are called _________________.

a: Payroll taxes
b: Negative cash flow
c: Labor burden
d: Any of the above

A

c: Labor burden

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19
Q

Items not specified in the project plans such as plumbing fixtures, electrical fixtures, and flooring can be handled by negotiating a budget for these items not yet decided upon. These additional monies set aside for the owner are called ___________ .

a: Contingencies
b: Allowances
c: Contract take off items
d: None of the above

A

b: Allowances

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20
Q

The most accurate way of estimating labor cost is to refer to you company’s ___________________ from similar jobs in the past.

a: Historical data
b: Files
c: Foreman
d: Any of the above

A

a: Historical data

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21
Q

True or False. Contractors who utilize a job cost recording system benefit by having these records to use for future bids.

A

True

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22
Q

Which of the following are overhead expenses?

a: Auto expenses
b: Postage
c: Office rental
d: All of the above

A

d: All of the above

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23
Q

Which of the following are indirect job cost expenses?

a: Equipment depreciation
b: A superintendent at the jobsite
c; Bonds and permits
d: All of the above

A

a: Equipment depreciation

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24
Q

Which of the following are direct job cost expenses?

a: Subcontractors fees
b: Material costs
c: Rental equipment fees
d: All of the above

A

d: All of the above

25
Q

A contractor developed his bid charging his customer $7.50 a square foot to purchase and install flooring materials. This type of estimate is referred to as?

a: Unit price estimate
b: Lump sum
c: Conceptual estimate

A

a: Unit price estimate

26
Q

True or False. A good way of managing a job cost recording system is to require employees to provide for actual time doing specific task using designated codes on their time cards.

A

True

27
Q

__________ assign a cost to each measurable item of work and these are listed separately on the estimate.

a: Lump Sum estimates
b: Unit price estimates
c: Fixed price estimates
d: Detailed survey estimates

A

b: Unit price estimates

28
Q

In this type of estimate, a contractor agrees to perform a prescribed project for a single amount, even in the event that the actual cost may be more than the stipulated amount.

a: Cost-plus fee
b: Unit price
c: Lump sum
d: Any of the above

A

c: Lump sum

29
Q

Any changes to the bid before it is due can be submitted by an _________.

a: Appeal
b: Addendum
c: Change order
d: Submittal

A

b: Addendum

30
Q

Factors that will influence and contribute to the cost of a project include all but the following:

a: Equipment
b: Financial stability
c: Overhead
d: Degree of difficulty

A

b: Financial stability

31
Q

Temporary storage facilities, dumpsters and utilities are considered _________ overhead.

a: Company
b: Project
c: Indirect
d: None of the above

A

b: Project

32
Q

When adding profit to an estimate, the value is usually:

a: A flat fee
b: A percentage of the total job cost
c: 30%
d: 25%

A

b: A percentage of the total job cost

33
Q

What are the first steps in completing an estimate?

a: Review project documents
b: Conduct environmental assessments
c: Inspect the job site
d: All of the above

A

d: All of the above

34
Q

What would be the best source to use when estimating job site overhead?

a: Overhead site survey
b: Local lumber company
c: Historical job site overhead costs records
d: None of the above

A

c: Historical job site overhead costs records

35
Q

A _____________ assigns tasks and materials to specific job categories, such as supervision, clean-up, labor/materials and project general conditions.

a: Value Engineering System
b: Contingency plan
c: Change Proposal Log
d: Job Cost System

A

d: Job Cost System

36
Q

True or False. Profit is the amount of money left over after a project is 100 percent complete and referred to as net, or clear profit.

A

True

37
Q

Before you present a proposal to a customer, you do you first have to create?

A

A cost estimate of the entire project.

38
Q

What should be reviewed while estimating?

A
  • Project documents (Drawings, specifications, contracts, and bonds)
  • Attend all pre-bid meetings
  • Determine costs of labor, materials, equipment and subcontractors.
39
Q

What are some variables that can affect the final cost of the project?

A
  • What type of soil is present
  • Will excavating costs be heavy
  • Will the site require special equipment and/or methods
  • Are electricity and water available
  • Will those have to be brought in
40
Q

Who generally prepares project documents?

A

Architects, Engineers, and attorneys generally.

41
Q

Explain Bonds and Insurance in regards to estimating?

A

Some projects may require insurance coverage that is higher than that which is normally carried. Performance, payment, and surety bonds are often required in addition to the surety bond all licensed contractors are required to have. Bid bonds, or bid security, is typical for larger, public works projects.

42
Q

What are allowances?

A

Funds that area allocated to specific items in the budget. For example, the lighting allowance will establish that all light fixtures be purchased for a certain amount. If the owner changes his/her mind, and chooses more expensive fixtures, they must be purchased by the owner above and beyond the contract price.

43
Q

What are Supplements?

A

Supplements provide additional information such as soil reports, project studies, and land surveys

44
Q

What are Addenda?

A

Addenda are additions or clarifications made to the project after it has been released for bidding and are often responses to bidder’s questions.

45
Q

What are Drawings and Plans?

A

Drawings describe the design of the project, while plans are technical drawings that encompass the total project. Drawings consist of plans, elevations, sectional drawings, and details.

46
Q

What are Specifications?

A

These detail materials, work methods, and quality requirements. The specifications are written descriptions that qualitatively define the work. On smaller projects, specifications are described by notes on the drawings.

47
Q

What are General Conditions?

A

This is the term for the duties and obligations required for performing the work such as preparing shop drawings or maintaining as-built drawings.

48
Q

What are Supplementary Conditions?

A

These modify and revise the general conditions and supersede them

49
Q

What is the Quantity Take-off Method?

A

It involves counting the number of items associated with a particular construction project, determining the associated materials and labor costs, and formulating a bid (or estimate) as apart of the bidding process.
First determine labor costs and burden. Figure out materials, allowances, and contingencies, and how they will impact the outcome of the project, include the direct costs of rented or leased equipment. Also consider:
- Subcontractors if need
- Project and company overhead
- Company overhead
- Add markup for profit being careful to keep your bid competitive.

50
Q

What are the 10 steps to estimating?

A
  1. Identify labor costs
  2. Labor Burden
  3. Materials
  4. Equipment Cost
  5. Subcontractors
  6. Allowances
  7. Contingencies
  8. Project Overhead: Costs associate with the project but not labor and materials.
  9. Company Overhead: The cost of running the business itself.
  10. Add markup and Determine Profit
51
Q

What is a Conceptual Estimate?

A

Starts when the owner begins planning a project, and before the design starts. The owner has a need for a project and would like to know what it could cost or what could be delivered for a rough budget.
With this type of estimate many assumptions are used, based on previously built projects of equal size and type. When using prices from previously built projects, material and labor escalations should be taken into consideration when settling the beginning budget.

52
Q

What are Square-Foot estimates?

A

These can be split into two groups: square-foot total building estimates and square-foot area estimates for specific trades.
Square-Foot Total: To do this you measure the square foot of the entire building and multiplying a square-foot unit cost number based on past project history.
This method can help determine a rough cost for budget purposes with little design.

Square-Foot-Area: Estimates or specific trades, such as concrete or drywall are used by measuring the square-foot of the specific trade work and multiplying a unit cost number for their perspective work. This can be a quick method to price specific trade work. Often these prices are given verbally, and a follow-up quote should be requested.

53
Q

What is a Lump Sum or Fixed Price Estimate?

A

A form of construction estimating in which a fixed price is given for the entire project. It is called lump sum because the contractor is required to submit a total price for the project, instead of bidding on individual stages or work units. This type of estimate is the most common for simple, small projects with a well-defined scope, and an unlikely chance of complications.

54
Q

What is a Unit Price Estimate?

A

This is a form of construction estimating that quotes a given price for each unit of work. Unlike Lump Sum, in Unit Price Estimating a cost is assigned to each measurable item of work and these items are listed separately on the estimate. The total value of the contract can be calculated by multiplying identical units of work at a fixed unit price. This type of estimate allows for more flexibility during changes in scope or when reaching an agreement with change orders.

55
Q

What are the most common mistakes when it comes to estimating?

A
  • Mathematical Errors
  • Omissions in Labor or Materials
  • Non-standard Abbreviations
  • Using Incorrect Units of Measure
  • Failure to Visit the Project Site
  • Overlooking or Miscalculating Haulage Costs
  • Failure to Review Building Codes, Permits and Inspections
  • Failure to Consider Quality of Workmanship Required
  • Omitting Items Considered to be Minor
  • Failure to Review the Bids of Subcontractors
  • Taking Shortcuts in Cost Estimating
  • Not Allowing for Realistic Contingencies
  • Overlooking Items
56
Q

Why should you record job costs?

A

You will learn a lot by comparing actual costs to estimated costs. For a traditional bid project, cost codes cover the amount it costs a contractor to build a project, hopefully with a profit left over.

57
Q

What do construction analysts say the return should be on your overhead every year?

A

Between 10-25 percent

58
Q

What 5 factors is strategic pricing typically based on?

A
  • Add 10% for all self-performed work and 5% for subcontracted work
  • Add 20 to 25% for small jobs and 5 to 10% for larger projects
  • Analyze the variables and other contractors bidding
  • Consider how complete the bidding documents are
  • Consider have you worked for this owner before

1 Builders (Exam Review for Business Law) (13 decks)

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