Cost Estimate

Determined by one of the following methods:
a. Area and volume method: The estimate is based on a cost per square foot of the building and/or a cost per cubic foot of the building.
b. Unit use: The estimate is based on the cost of one unit multiplied by the number of units in the project. For example, in a hospital, the cost of one patient unit multiplied by the number of patient units in the project.
c. In-place unit: The estimate is based on the cost in place of a unit, such as doors, cubic yards of concrete etc.

Purpose

Cost estimates are crucial for planning, budgeting, and managing construction and engineering projects. They help stakeholders understand the financial requirements and feasibility of a project, guiding decision-making and ensuring resources are allocated efficiently.

Examples of Use

1. A construction company uses the area and volume method to estimate the cost of building a new office complex based on the total square footage.
2. A hospital project manager employs the unit use method to calculate the cost of a new wing by determining the cost per patient unit and multiplying it by the number of units.
3. An engineer uses the in-place unit method to estimate the cost of concrete needed for a bridge by calculating the cost per cubic yard and multiplying it by the total volume required.

Related Terms

• Budget Estimate: An approximation of project costs to determine its feasibility and secure initial funding.
• Detailed Estimate: A comprehensive calculation of all costs associated with a project, often used for final budgeting and planning.
• Preliminary Estimate: An initial rough estimate to provide a ballpark figure for project costs.

Notes

Accurate cost estimating requires thorough knowledge of construction practices, materials, labor costs, and market conditions. Various software tools and databases can aid in generating precise estimates.