【正文】 rental, insurance, and maintenance are necessary but are not direct costs of projects. The purchasing and accounting departments serve the different projects of the pany, but: 1) It is not economical to trace their costs to the projects. 2) obtaining a project does not directly impact purchasing and accounting department costs. All of these costs are included in general office overhead. The direct/indirect cost concept is hierarchical. The roofing subcontract amount is a direct project cost to the prime contractor. The subcontract includes the roofing contractor’s estimated direct and indirect costs and profit. Therefore, they are part of the prime contractor’s direct project costs. Similarly, the prime contractor’s bid is the sum of: Its estimated direct activity costs。 and laborers who place concrete, strip forms, and patch the concrete surface. A concrete pump and elephant trunk brought onto the site to place concrete is a direct equipment cost, and its operator is direct labor. Indirect costs consist of: (1) Large costs that would have occurred even if an activity had not been performed。 they are not physically traceable and are counted even if the activity is not performed. Indirect costs are also known as overhead. Construction costs are classified as materials, labor, and equipment. Direct materials for concrete walls include readymix concrete delivered to the site and placed in the forms, reinforcing steel fabricated off site and tied and placed in the forms, and plywood and form ties from which the forms are constructed. Direct labor includes carpenters who fabricate and erect the forms。 and the effect of the level of detail on accuracy of the estimate should be reasonably uniform for all ponents of the estimate. At the conceptual stage of design, the owner is trying to decide whether to continue with Facility procurement and the designer is working with the owner to establish the scope and general characteristics of the facility. An order of magnitude estimate is sufficient for decisions, particularly if it is sensitive to changes in scope. When design is pleted, it is important that contract prices be based on adequate estimating detail. Yet even here one should avoid needless detail. Detailed estimates will include procurement, fabrication, and installation of materials and equipment, but fasteners such as nails and screws and lengths of welds are not individually counted. Completeness Another challenge is to include all items that will be in the facility yet to add nothing extra. The estimator must have the vision to see beyond the obvious ponents and their primary costs of construction, primarily in preparing cost estimates prior to pletion of design. In estimating industrial work, the major items of process equipment are obvious early in the design period. Estimates must include not only costs of procuring equipment but also the cost of its installation and the cost of piping, wiring, controls, and structure to support it. In addition to the cost of performing construction, there are major costs of providing administrative and physical infrastructure for the construction process, such as permits, insurance, financing, security, transportation, accounting, purchasing, utilities, warehousing, and shops. Onto this can be added costs of delays and changes that will have occurred before the project has been pleted. There may seem to be a conflict between the principles of pleteness and level of detail, but there is none. By level of detail, an engineer describes detail only at the level appropriate to decisions。 Cost Estimation Introduction To estimate is to produce a statement of the approximate quantity of material, time, or cost to perform construction. This statement of quantity is called an estimate, and its purpose is to provide information to construction decisions. Typical decisions include procurement and pricing of construction, establishing contractual amounts for payment and controlling actual quantities by project management. Estimates provide a similar level of information to some decisions as financial accounting information provides to others. Financial statements are required to ply with generally accepted accounting principles (GAAP), described in accounting literature, to ensure that the information they provide is accurate and useful to decisions. Estimating literature does not provide similar generally accepted estimating principles against which estimating practices can be judged. This paper suggests general estimating 1 Principles that guide good estimating practice Generally accepted accounting principles Cost estimating shares some similarities with financial accounting. Both provide financial information that is needed in important decisions by a firm’s management, as well as financial information to decisions outside the firm. Both also require standard practices that can be repeated from project to project or period to period. Selecting estimating and accounting methods is as much an art as a science, to meet practical situations of reality. Financial accounting practice must conform to “generally accepted accounting principles,” which is generic for a large group of standards, conventions, concepts, guidelines, and assumptions that guide but do not dictate accountants’ decisions. Financial data can be represented in a variety of ways and still ply with GAAP. There is no one general set of GAAP, as demonstrated by the fact that different accounting textbooks have different lists of GAAP items. However, the different lists and descriptions do not conflict, in that they describe the same basic approach to financial accounting. Estimating does not have a similar literature on generally accepted estimating principles (GAEP), though there is considerable literature on estimating practice.