CMA Financial Acumen for Architects 2 — Questions and Answers
Question 1: A developer asks an architect to estimate construction cost for a 50,000 SF office building using the square-foot method. The local unit cost is $220/SF. What is the preliminary estimate?
- $9,000,000
- $10,500,000
- $11,000,000 (Correct answer)
- $12,000,000
Correct answer: $11,000,000
50,000 SF × $220/SF = $11,000,000 preliminary construction cost estimate.
Question 2: Which contingency line item specifically covers design uncertainties and incomplete drawings during the schematic design phase?
- Construction contingency
- Owner's contingency
- Design contingency (Correct answer)
- Bid contingency
Correct answer: Design contingency
Design contingency covers uncertainties arising from incomplete or evolving design decisions before construction documents are finalized.
Question 3: An architect's Basic Services fee is $450,000 on a $5,000,000 construction budget. What percentage fee is this?
- 7%
- 8%
- 9% (Correct answer)
- 10%
Correct answer: 9%
$450,000 ÷ $5,000,000 = 0.09, or 9% of the construction cost.
Question 4: Under AIA B101, which phase typically earns the largest percentage of an architect's basic services fee?
- Schematic Design
- Design Development
- Construction Documents (Correct answer)
- Construction Administration
Correct answer: Construction Documents
Construction Documents is the most labor-intensive phase and typically commands the largest fee percentage, often around 40% of basic services.
Question 5: Life-cycle cost analysis (LCCA) is best used by an architect to:
- Determine the lowest first-cost construction option
- Evaluate total ownership cost over a building's lifespan (Correct answer)
- Negotiate lower contractor bids
- Calculate depreciation for tax purposes
Correct answer: Evaluate total ownership cost over a building's lifespan
LCCA evaluates initial cost, operating expenses, maintenance, and replacement costs over a building's service life to identify the most economical long-term option.
Question 6: A contractor submits a $75,000 change order for unforeseen subsurface conditions. Which budget line should typically absorb this cost?
- Design contingency
- Soft costs
- Owner's construction contingency (Correct answer)
- Architect's fee reserve
Correct answer: Owner's construction contingency
Unforeseen site conditions are typically absorbed by the owner's construction contingency, which exists precisely for unexpected field conditions.
Question 7: Which delivery method transfers the greatest financial risk for cost overruns to a single entity, protecting the owner from budget uncertainty?
- Design-Bid-Build (stipulated sum)
- Construction Management at Risk (GMP)
- Design-Build (lump sum) (Correct answer)
- Cost-plus with no cap
Correct answer: Design-Build (lump sum)
Design-Build with a lump-sum contract places all cost risk on the design-builder, giving the owner maximum budget certainty.
CMA Financial Acumen for Architects 2
A developer asks an architect to estimate construction cost for a 50,000 SF office building using the square-foot method.
The local unit cost is $220/SF.
What is the preliminary estimate?