CHAPTER XV.

ITS
T
15.5
Classify the following costs as direct (D) or indirect I WILL SAY
(I):
STAFF D
SUBJECT
Project Staff Tools Audit and legal C SUPPLIES
Raw Materials Rent TEAM
Project Supplies Training equipment
Labour HAND D
Administrative staff
Office supplies

COST15.9
FACTOR
Sun-Metro
ANDROSBus plans to build a 600-car parking lot
ISLAND
in the city's suburbs that will encourage people to
takeRAPID CITY of the Park and Ride program to get
advantage COST
to work or downtown shopping. Prepare a C/LOCATION
preliminary estimate of the cost of parking if the
cost per space is $4,700. NO. CARS

EST COST $

15.11
The Department of Defense uses cost factors
by area (FCA) to adjust for differences in
construction costs in different regions of the
country (and the world). The area cost factor for
Andros Island, Bahamas, is 1.70, while for Rapid
City, South Dakota, it is 0.93. If in the latter city a
refrigerated warehouse for processing costs
$1,350,000, calculate its cost in Andros.

WAREHOUSE
COST
WINERY BEAR $

15.16
The following table shows the activities at a
site to build a small bridge. The table presents
the quantity of each activity, the unit of 2240
measurement associated with each activity 1667
and its unit cost. Using these data, determine
a) the total cost of the structural excavation, b) 120
the total cost of the tower to place the piles, 340
and c) the total cost of labor for the job.
 Unit of Unit labor Unit cost of Unit cost of
measurem cost, $ equipment, S material, $
ent
Activity Amount
Excavation,
1 667 cy 1.35 1.43 0 to
unclassified
)
Excavation. 120 cy 21.31 5.00 0
structural b
Filling, com 340 cy 7.78 1.72 0
agreed
Tower to place job Es 5 688 6 420 300
batteries

Batteries, steel. 16.57

additi
on

15.21
An engineer who owns a construction
company that specializes in large commercial
projects noted that material costs have
increased at a rate of 1% per month over the INDEX VALUE
past 12 months. If a materials cost index were INCREASE PERIOD
created for each month of that year with the (MONTHS)
index value equal to 100 at the beginning of
the year, what would be its value at the end of
the year? Express your answer to two decimal INCREASE AN
places.
FINAL VALUE
$11

15.23
General electro-pneumatic pressure
transducers convert the pressure they sense
into a regulated output pressure in direct COST IN 1985
proportion to an input electrical signal. The INDEX
cost of a certain transducer was $194 in 1985,
when the M&S index for equipment was 789.6.
If the price increased exactly in proportion to
the mentioned index, what would have been INDEX IN 2010
its cost in 2010 (in the middle of the year)
when the value of the index was 1,461.3?

COST IN 2010=
15.25
The ENR construction cost index (ICC) for $ 359.03
COST 2010
August 2010 had a value of 8,837.37 with 1913 as
the base year with a value of 100. If the base year
is 1967 with a value of 1.0, the ICC for August 2010 COST 2010
would be 8.2272. In this case, what is the value of
the ICC for 1967, when the base year is 1913?
VALUE FOR 1967

15.28
If the materials cost index decreased 2% during the
same period that the construction cost index
increased 2%, what does this suggest about the THE COST OF THE
labor cost index if labor represents 35% of the M
construction cost? the construction?

15.30
A high-pressure (1000 psi) stainless steel pump
with variable frequency motor is installed in a
reverse osmosis seawater desalination pilot plant
that recovers water from the membrane BOM
concentrate at a rate of 4 gallons per minute (gpm).
The cost of the pump was $13,000. Due to the PRODUCTION
favorable results of the pilot study, the city COST (GP CAP
government wants to move to the full system that
will produce 500 gpm. Determine the estimated COST (EXPO RATIO
cost of the largest pump if the exponent in the (GPM)
cost-capacity equation has a value of 0.37.
ESTIMATED COST

15.36
A mini wind tunnel to calibrate the blades or hot
wire anemometers cost $3750 in 2002, when the
M&S equipment index value was 1104.2. If this COST 2002
value is now 1 620.6, calculate the cost of a wind INDEX
tunnel with twice the length. The exponent of the
cost-capacity equation is 0.89.
CURRENT INDEX
EXPONENT
CURRENT COST OF
$ 10,199.43

15.39
The cost of equipment to remove arsenic from a
well delivering 800 gallons per minute (gpm) is $1.8
million. If the overall cost factor for this type of COST
treatment system is 2.25, what is the total cost of FACTOR
the plant expected to be?
15.43 OSTO TOTAL ESPER
A chemical engineer at Western Refining estimated
that the total cost of a fuel oil sulfur removal
system will be $2.3 million. If the direct cost factor COST $
is 1.35 and the indirect cost factor is 0.41, what is DI COST FACTOR
the total cost of the equipment? Both factors apply
to the cost of the equipment delivered. COST FACTOR IN

15.45
Nicole is an engineer on temporary assignment at a COST TO $
refining operation in Seaside; revised a cost
estimate of $430,000 that includes some new
processing equipment for the ethylene line. The ESTIMATE
equipment itself is estimated at $250,000 with a ESTEEM
construction cost factor of 0.30 and an installation
cost factor of 0.30. No indirect cost factor is C FACTOR
indicated, but she knows from other sources that C OF I FACTOR
indirect cost is an adjustable amount that increases
the total direct cost of the line equipment. a) If the
indirect cost factor is to be 0.40, determine INDIRECT FACTOR
whether the current estimate includes a factor
comparable to this value. b) Determine the
estimated cost if the indirect cost factor of 0.40 is
used.
a) ES FACTOR

b) ESTIMATED COST
COST IMATION

CTOS
THE PROJECT
S PREMIUMS
PROJECT
TRAINING
AND WORK
INDIRECTS
AUDIT AND LEGAL
TOOLS
RENT
ADMINISTRATIVE
STAFF
OFFICE SUPPLIES

$ 4,700.00
600

DRIVE
2,820,000.00

1.7
0.93

$ 1,350,000.00

ON ANDROS ISLAND}
2,467,741.94
1.35 1.43 0
21.31 5 0
7.78 1.72 0
5688 6420 300
3.13 2.93 16.57
$ 3,157.20
$ 12,408.00

$ 2,250.45
$ 2,557.20
$ 2,645.20
$ 5,688.00
$ 7,011.20
$ 20,152.05

100
1%
12

12.68%

AL OF THE YEAR 2.68

$ 194.00
789.6

1461.3

8837.37 ----> COST 1913 100

YEAR OF WORK INCREASED MORE THAN 2%

$ 13,000.00
500
0.37
4

$ 77,588.98

3750
1104.2

1620.6
0.89
TUNNEL WITH THE D LENGTH=

$ 1,800,000.00
2.25
PLANT ADDITION
4,050,000.00

$ 2,300,000.00
1.35
0.41

SUCH EQUIPMENT
1,306,818.18

430000
250000
0.3
0.3

0.4

1.6
0.075 IS LESS THAN 0.4

$ 560,000.00