Topic 4: Research Analysis & Selection Flashcards
What are the possible expenses that can occur on a job?
- construction costs
- furniture, fixtures, equipment
- contractors overhead and profit
- professional fees
- taxes
- moving costs
- telephone and data system install
- contingencies
Are FF&E items generally their own budget item? Why?
Yes, they are specified, purchased, and installed different than other construction items
What is the difference between a contractors general over head and their project over head?
General overhead is the cost running the contracting business, while the project overhead the money it takes to complete a spefic job
How does a contractor calculate their profit on a job?
A percentage of the total cost of labour, materials, equipment, and overhead, generally this rangers from 5% to 15%
Why are contingencies added to a budget?
To account for unforsten change requests and other conditions that will add to total cost of the job. Typically contingencies are 5% - 10% of total budget
When are budgets calculated?
It is an ongoing activity which is revised at each phase of a project as more decisions are made.
How are budgets based on size calculated before much design work has started?
Anticipated square footage of a project is multiplied by the cost per square foot. The cost may be based on the designers or clients experience
How are budgets calculated once the design progresses and their is a better idea of the exact scope?
Parameter method: an expanded itemization of construction quantities and furnishing and assignment of unit costs to these quantities
ADD PIC OF CHART PG. 18-6
What is the benefit of using the parameter method for budgeting?
Provides more in depth lost breakdown which allows for evaluation and modification to the budget
What is an alternative to the parameter method to evaluate other budget construction components?
Matrix costing:a technique in which a matrix is drawn with various alternatives along one side and the individual elements that combine to make up the total lost of the alternatives along the other side
When budgeting with the parameter method, what happens when an item cannot be estimated using a construction unit?
An allowance is used - a set amount of money is estimated by the interior designer to cover the particular line item
What is the most precise kind of budgeting?
Detailed quantity take-offs: counting actual quantities of materials and furnishing and multiplying these quantities by firm quoted costs
How is a cost index used to apply costs from one part of a country to anther?
- Divide the higher index by the lower index
- Multiply the answer from above by the base cost
ADD PG. 18-9 EXAMPLE
What is the life-cycle cost analysis (LCC)
A method for determine the total cost of a building or building component
What is the “discount rate” when referring to a building Life cycle cost?
Converts future costs to their equivalent present values
What costs are involved in a life cycle cost analysis?
- Initial costs
- Operational costs
- Maintenance costs
- Replacement costs
- Finance costs
- Taxes for initial and operating costs
- Residual value (resale value, salvage value, scrape value etc.)
What is the study period of a life cycle cost analysis?
The costs estimated over a length of time - this length varies with the needs of the client and useful life of the material or system.
What is the difference between life cycle cost analysis (LLC) and life cycle assessment (LCA)?
LLC analyzes the total cost of a building over where LCA analyzes the environmental impact
