CBP Estimating & Cost Control Flashcards

Which cost control technique involves comparing actual expenditures to the budget at regular intervals throughout the project?

Answer: Cost forecasting

Cost forecasting uses current performance data to project total costs at completion, enabling proactive budget management throughout the project.

A subcontractor's bid is $120,000. The general contractor applies a 10% markup. What is the total cost to the owner for this line item?

Answer: $132,000

$120,000 × 1.10 = $132,000, which covers both the subcontractor cost and the GC's 10% markup.

In the context of the CBP exam, 'value engineering' is primarily used to:

Answer: Find lower-cost alternatives that maintain required function and quality

Value engineering analyzes project components to identify cost-saving alternatives that maintain the required function, quality, and performance.

Which factor most directly influences the labor burden rate applied to worker wages in a construction estimate?

Answer: Payroll taxes, insurance, and fringe benefits

The labor burden includes payroll taxes (FICA, FUTA), workers' compensation insurance, health benefits, and other employee costs added on top of base wages.

A 'schedule of values' submitted with a pay application is used by the owner to:

Answer: Verify that work billed matches actual construction progress

The schedule of values breaks down the contract sum into line items so the owner can verify that each pay application reflects actual work completed in the field.

When calculating equipment ownership costs for a construction estimate, which of the following is typically included?

Answer: Depreciation, interest, insurance, and storage

Ownership costs include depreciation of the asset, financing interest, insurance premiums, and storage or parking costs, representing the cost of owning the equipment.