Construction Management Practice Exam

Which aspect of a project can lead to increased indirect costs?

1. Quality

2. Direct costs

3. Duration

4. All of the above

The correct answer is: Duration

The aspect of a project that can lead to increased indirect costs is predominantly related to the duration of the project. Indirect costs, also known as overhead costs, typically include expenses not directly tied to a specific project activity, such as administrative salaries, utilities, and rent for the construction site office. When the duration of a project extends beyond the initial timeline, the indirect costs increase because these expenses continue to accrue over a longer period. For example, if a project is delayed due to unforeseen circumstances, the costs associated with site utilities, management time, and possibly insurance will accumulate, thereby increasing the overall indirect costs attributed to the project. Understanding this relationship highlights the importance of effective scheduling and project management practices, as delays can have a significant financial impact beyond the immediate direct costs of materials and labor required for construction. While quality and direct costs can influence total project costs, it is the duration that specifically correlates with an increase in indirect costs.