Methods of Estimation MCQ with answer and solution

Concept

Contingencies are added to an estimate as a small percentage (usually 3% to 5%) of the total estimated cost to cover unforeseen expenses.

Formula

Contingency amount = (3 to 5%) × Total estimated cost of works

Step-by-step solution

1. Contingencies cover small unforeseen items and changes during work. 2. They are not tied to any one item rate. 3. So they are added at the end as a percentage of the total cost of the estimate. 4. Typical value is 3% to 5% of the estimated cost. 5. Answer is (B) total cost.

Explanation

Contingency is an extra amount kept for unexpected expenses during construction. It is calculated as a small percentage (about 3-5%) of the total estimated cost. It is added at the end of the abstract of estimate.

Why the other options are wrong

(A) Contingency is not added to the rate of each item; rates are taken from the Schedule of Rates. (C) Supervision charges are themselves a separate percentage item, not the base for contingency. (D) Establishment charges are also a separate percentage item, not the base for contingency.

Shortcut

Contingency and work-charged establishment are both taken as a % of total estimated cost.

Common mistake

Confusing contingencies with establishment or supervision charges, which are separate items.