Estimating Practice Exam

Are general expenses typically priced at the beginning or end of the estimate process?

1. Beginning

2. End

3. In the middle

4. They are not priced

The correct answer is: End

General expenses are typically addressed at the end of the estimate process. This occurs because the overall project costs need to be clearly defined, and general expenses, which might include items such as overhead, administrative costs, and insurance, are often calculated after the direct costs of labor, materials, and other specific categories have been established. By placing the general expenses at the end, estimators can ensure that these costs are aligned with the accrued direct costs of the project, providing a comprehensive view of the total expenditure. This allows for a more accurate reflection of the true cost of the project, ensuring that all expenses, both direct and indirect, are accounted for before finalizing the estimate. In contrast, the other options imply that general expenses might be considered too early in the process or not at all, which does not align with standard estimating practices where comprehensive cost assessments are made after direct costs have been determined.