Q.20 Which term indicates the stages in which the total predetermined cost of construction of the project is to be spread over?
- ACost determination
- BBudget planningCorrect
- CCost planning
- DFinancial planning
Solution
Concept
Budget planning spreads the total predetermined project cost over the stages or time periods of construction.
Step-by-step solution
1. The total cost of the project is fixed first (predetermined). 2. This cost must then be divided over the stages or time periods of work. 3. The planning that shows how much money is needed in each stage is budget planning. 4. Answer is option B.
Explanation
After the total cost of a project is fixed, it is divided among the stages of construction. This is called budget planning. It shows how much money is needed in each period, so funds can be arranged on time.
Why the other options are wrong
A: Cost determination only finds the total cost. It does not spread it over stages. C: Cost planning fixes and controls the cost of the building and its elements during design, not stage-wise spending. D: Financial planning is about arranging the sources of money (loans, capital) for the project.
Shortcut
Spreading a fixed total cost over stages or time = Budget.
Common mistake
Choosing cost planning because the question uses the word 'cost'.
Correct answer: B) Budget planning