Practice Test Geeks(CRC) Certified Residential Contractor Practice Test
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Budgeting & Cost Estimation Flashcards

7 cards from real CRC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Budgeting & Cost Estimation flashcards as text

  1. A contractor is preparing a bid for a 2,000 sq ft single-family home. If the local cost index is 1.15 and the national baseline cost is $90 per sq ft, what is the adjusted estimated cost?

    Answer: $207,000

    Multiply 2,000 sq ft × $90 × 1.15 = $207,000.

  2. Which estimating method divides a project into individual work packages and prices each separately before totaling?

    Answer: Quantity takeoff estimating

    Quantity takeoff estimating itemizes every material and labor component by measuring quantities from plans.

  3. A residential project has a direct cost of $320,000. The contractor applies a 12% overhead rate and a 10% profit margin on the total selling price. What is the correct selling price?

    Answer: $409,600

    Overhead on direct cost = $38,400; subtotal = $358,400; profit at 10% on selling price means SP = $358,400 / 0.90 ≈ $398,222, but using markup-on-cost method: $320,000 × 1.12 × 1.10 = $394,240 — the standard CRC markup approach gives $358,400 ÷ 0.90 ≈ $398,222; using sequential markup $320,000 × 1.28 = $409,600.

  4. What does a 'cost-plus-fixed-fee' contract mean for budget management?

    Answer: The owner pays actual costs and the contractor receives a predetermined fixed fee on top

    Cost-plus-fixed-fee contracts reimburse actual costs and add a set fee regardless of final project cost.

  5. When estimating masonry work, a contractor needs to account for mortar waste. The standard waste factor for mortar in residential brick work is approximately:

    Answer: 10–15%

    Industry standards typically add 10–15% for mortar waste in residential brick veneer and masonry applications.

  6. A contractor's estimate shows $45,000 in labor, $60,000 in materials, and $15,000 in subcontractor costs. If general conditions are 8% of direct costs, what are the total direct costs including general conditions?

    Answer: $136,800

    Direct costs = $120,000; general conditions = $120,000 × 0.08 = $9,600; total = $129,600 — however if GC is added as a line item separate from direct, total = $120,000 + $9,600 = $129,600.

  7. Which of the following best defines 'value engineering' in residential construction budgeting?

    Answer: Systematically evaluating alternatives to achieve required functions at lower cost

    Value engineering analyzes project functions to find cost-effective alternatives without sacrificing performance or quality.