A construction company discovers that actual job costs are consistently 15% higher than estimated costs across multiple projects. This variance is MOST likely due to:
Correct Answer
A) Inadequate cost estimating procedures
Consistent cost overruns across multiple projects indicate systematic problems with the estimating process, such as outdated cost data, inadequate allowances for waste, or failure to account for all cost components.
Why This Is the Correct Answer
Consistent cost overruns across multiple projects indicate systematic problems with the estimating process, such as outdated cost data, inadequate allowances for waste, or failure to account for all cost components.
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