Estimating Practice Exam

What term is used to describe the percentage of total labor cost that includes hand tools and consumables?

1. Equipment Allowance

2. Small Tools Allowance

3. Labor Cost Adjustment

4. Consumables Adjustment

The correct answer is: Small Tools Allowance

The term "Small Tools Allowance" is used to describe the percentage of total labor cost that includes hand tools and consumables. This allowance captures the costs associated with the smaller tools and supplies necessary for completing labor tasks, which are not typically included in larger equipment or machinery costs. In estimating projects, including this allowance is crucial as it reflects the real cost of performing labor. It's an essential component of labor costing, ensuring that all necessary tools for efficient job performance are accounted for in the budget. Other terms, while related to costs, do not specifically refer to the small tools and consumables. An Equipment Allowance generally pertains to larger machinery or tools, while Labor Cost Adjustment and Consumables Adjustment might address other aspects of labor costs or resource expenditures but do not specifically denote the inclusion of hand tools and consumables in the way that the Small Tools Allowance does.