Exam 11: Introducing the Cost Approach

Indirect cost elements should not be included in cost estimates.

Replacement cost and reproduction cost are the same.

Direct cost elements include labor, materials, and design costs.

The unit-in-place method of estimating costs is most often used as a supplement to refine the square-foot method.

Increased floor area results in higher costs per square foot.

The cost estimates used in appraisals should reflect cost levels on the date of value, instead of actual or historic costs.

Cost estimates are useful only in the cost approach to value.

Some cost manual services provide on-line computer access.

The cost approach is often emphasized when estimating the value of new or nearly new property.

The quantity survey method is the most practical and widely used method of estimating construction costs.