Oregon Construction Contractors (CCB) Practice Test

What method bundles all cost factors such as labor, materials, and subcontractors to produce a total unit price for a task?

1. Unit cost method

2. Cost-plus contracting

3. Unit price method

4. Fixed price method

The correct answer is: Unit price method

The method that bundles all cost factors, including labor, materials, and subcontractors, to produce a total unit price for a task is known as the unit price method. This method is particularly effective in construction projects where tasks can be broken down into quantifiable units. By assigning a price to each unit, contractors can precisely estimate the costs associated with individual components of a project. Using the unit price method allows for greater transparency in pricing and can facilitate easier adjustments to costs if the scope of work changes. Each unit's price can incorporate all related expenses, which helps in managing budgets and expectations throughout the project lifecycle. This approach is common in projects where quantities are highly variable or not fully known in advance, providing a systematic way to account for varying labor and material costs. The other methods listed—such as cost-plus contracting, which allows for reimbursement of incurred costs plus a fee for profit, or fixed price method, which sets a total lump sum charge irrespective of actual costs—do not bundle costs in the same way as the unit price method does. Therefore, the unit price method stands out for its ability to aggregate costs into a straightforward per-unit pricing structure.