Deck 9: Pricing Construction Equipment

Question 1

Equipment that is used for specific tasks is priced directly against the takeoff items.

Answer 1

True

Question 2

Plant, equipment, and tools used in construction operations are priced in the same category in the estimate.

Answer 2

False

Question 3

The percentage of the total labor cost that includes such things as hand tools up to a certain value and other consumables are referred to as the "____."

A)Small Items Allowance
B)Overhead Allowance
C)Overrun Allowance
D)Small Tools Allowance

Answer 3

D

Question 4

The "Small Tools Allowance" is included with the "____" that are found toward the end of the estimate Summary Sheet.

A)add-ons
B)extras
C)overages
D)overhead

Question 5

More often than not, equipment is rented with an operator.

Question 6

____ includes an amount for company overhead costs and an amount for profit.

A)Depreciation
B)Markup
C)Inflation
D)Deflation

Question 7

Since the rental rate quoted by a contractor to another party for the use of the contractor's equipment is, in a sense, a kind of bid, the same considerations should be applied to the markup on the rental rate as are applied to markup on any of a contractor's bids.

Question 8

Which of the following expenses is NOT considered when determining the full ownership cost of material?

A)Fuel and lubrication
B)Storage
C)Maintenance and repair
D)Leasing fees

Question 9

The ____ method is the most commonly used method of calculating depreciation.

A)inverted
B)straight-line
C)exponential
D)logarithmic

Question 10

In everyday usage, the term ____ refers to the decline in market value of an asset.

A)depreciation
B)appreciation
C)devaluation
D)inflation

Question 11

A contractor must own some basic construction equipment in order to carry on business.

Question 12

With the ____ method of depreciation, the annual depreciation amounts decline as the asset gets older.

A)declining-balance
B)straight-line
C)exponential
D)delivery

Question 13

On-site equipment that is used intermittently is priced as a general expense item.

Question 14

Using the straight-line depreciation method results in depreciation amounts that are high to begin with but decline as assets get older.

Question 15

A spreadsheet template can be readily set up to provide the basic format of the calculation process; then the data applicable to the specific item of equipment can be inserted to generate the ownership cost of that item.

Question 16

The interest expense rate and the rate for taxes, insurance, and storage costs are often combined to give a ____.

A)total cost overhead rate
B)total depreciation overhead rate
C)total value overhead rate
D)total equipment overhead rate

Question 17

Hand tools up to a certain value together with blades, drill bits, and other consumables used in the work are priced as a ____ of the total labor price of the estimate.

A)fixed cost
B)percentage
C)variable cost
D)contingency

Question 18

Company ____ costs are basically the fixed costs associated with running a business.

A)labor
B)administrative
C)overhead
D)capital

Question 19

The process of allocating the cost of the item over its useful life is known as ____.

A)depreciation
B)deflation
C)amortization
D)inflation

Question 20

When straight-line depreciation is used, the amount of depreciation from initial cost to salvage value is distributed equally each year over the life of the asset.