| Course | BU 442 Cost and Time Management |
|---|---|
| Unit | Unit 2 |
| Paper type | Cost estimate with basis |
| Length | About 710 words, 5 pages |
| Format | APA 7 student paper |
| School | Herzing University |
| Program | BS in Project Management |
| Updated | September 2026 |
Free sample paper for BU 442 Unit 2
One Million Three Hundred Seventeen Thousand Dollars, Line by Line With Its Source: A Cost Estimate With Basis for a Composite Fort Wayne Shared Commercial Kitchen
Student Name
Business, Herzing University
BU 442: Cost and Time Management
Instructor Name
January 28, 2026
One Million Three Hundred Seventeen Thousand Dollars, Line by Line With Its Source: A Cost Estimate With Basis for a Composite Fort Wayne Shared Commercial Kitchen
What This Estimate Covers
This is the bottom-up cost estimate for turning an empty Indiana hardware store into rentable kitchen space for Fort Wayne Food Works, the composite nonprofit used throughout this course. It was prepared in late January 2026 at about 60 percent design, the point the estimating methods paper identified as the right time for a bottom-up estimate. It prices the project element by element and gives each line its estimating method, the source of its input and the main assumption it rests on. It ends with what is excluded and a confidence range.
The PMBOK guide calls this supporting information the basis of estimates and treats it as part of the estimate rather than an attachment (Project Management Institute, 2017), since a figure nobody can trace cannot be defended or updated. The basis also makes the estimate reusable: when a quote changes, the line and the assumption it rested on can be found and revised without repricing everything. The eight most uncertain lines also carry three-point values, optimistic, most likely and pessimistic, combined with the PERT weighting, so that the budget unit can derive contingency from them.
The Estimate
Amounts are rounded to the nearest $500, and each line maps to one element of the work breakdown used in the next unit. Three-point values are shown in thousands of dollars as optimistic, most likely and pessimistic.
| Element | Estimate | Method | Source of input | Main assumption | Three-point (thousands) |
|---|---|---|---|---|---|
| 1. Design and engineering | $68,000 | Fixed fee | Two architect and engineer proposals | Permit set plus construction administration | Not needed |
| 2. Permits and plan review | $6,500 | Fee schedule | City fee schedule applied to construction value | No variance hearing required | Not needed |
| 3. Demolition and abatement | $42,000 | Bottom-up | Site survey quantities; abatement contractor rates | Asbestos limited to pipe insulation; floor mastic untested | 36 / 40 / 56 |
| 4. Electrical service and distribution | $118,000 | Contractor budget quote | Electrical contractor walk-through | Utility transformer adequate in the likely case | 100 / 115 / 150 |
| 5. Plumbing and grease interceptor | $96,000 | Contractor budget quote | Plumbing contractor; interceptor sizing by engineer | Existing sewer line reusable | 85 / 92 / 125 |
| 6. Heating, cooling and make-up air | $132,000 | Contractor budget quote | Mechanical contractor | Roof carries units without reinforcement | 115 / 128 / 165 |
| 7. Exhaust hoods, 48 feet | $164,000 | Parametric plus install quote | Fabricator rate per foot; installer quote | Standard stainless hoods, no custom lengths | 150 / 160 / 194 |
| 8. Two walk-in coolers and a freezer | $88,000 | Vendor quote | Refrigeration vendor | Prefabricated panels; indoor condensers | 80 / 87 / 100 |
| 9. Interior construction | $185,000 | Bottom-up | Quantities from drawings; regional unit rates | Existing slab level enough for epoxy flooring | 165 / 180 / 225 |
| 10. Fire suppression for hoods | $24,000 | Contractor quote | Suppression contractor | One system per hood line | Not needed |
| 11. Kitchen equipment and setting | $282,000 | Priced equipment list | Dealer quote for $260,000; setting labor $22,000 | Equipment list final at this stage | 270 / 280 / 302 |
| 12. Inspections and health approval | $3,500 | Fee schedule | County health department and city fees | One re-inspection | Not needed |
| 13. Commissioning and training | $12,000 | Time-based allowance | Vendor start-up days and staff training time | Five working days | Not needed |
| 14. Project management and general conditions | $96,000 | Time-based | 27 weeks at about $3,555 per week | Schedule of about 135 working days | Not needed |
| Total | $1,317,000 |
Reading the Basis
The three-point lines were chosen where the assumption could easily fail. The electrical service is the clearest case: the most likely value assumes the utility's transformer can carry the new load, but if it cannot, the pessimistic value of $150,000 applies. The abatement line assumes asbestos is limited to pipe insulation because the floor mastic has not yet been tested; a positive test would push that line toward its pessimistic value. For each three-point line, the estimate uses the PERT weighted mean, which counts the most likely value four times and each extreme once, then divides by six. For the electrical line, that is (100 + 460 + 150) / 6, or about $118,000.
The bottom-up total of about $1.32 million is lower than the parametric estimate of about $1.47 million prepared earlier. Two reasons explain most of the gap. The parametric kitchen rate assumed new floors and walls throughout, but the survey found that 40 percent of the existing walls can stay. And the hood allowance in the parametric figure was based on custom lengths that the design has since standardized. The difference is recorded so that the board does not wonder which figure is right.
What Is Excluded
Several costs are deliberately outside this estimate, and each is named so it cannot be mistaken for an omission. The building itself is excluded, since it was donated to Food Works in 2025. Contingency and management reserve are excluded here and are set in the budget unit. Financing costs on the construction loan are excluded. Office furniture and small kitchen tools that tenants bring are excluded. Any charge from the electric utility beyond the service connection fee included in line 4 is excluded, because the utility has not yet said whether it will require a new transformer at its own or the customer's expense. Cost escalation beyond December 2026 is excluded, since construction is expected to finish in August.
Confidence Range
At about 60 percent design, with quotes rather than bids for most trades, this estimate sits near Class 3 in the AACE International (2020) classification. The team states its range as 10 percent below to 20 percent above the point estimate, about $1.19 million to $1.58 million. The range is asymmetric on purpose: the pessimistic values of the uncertain lines are further from their most likely values than the optimistic ones, which is typical of renovation work, where the building reveals problems as it is opened but rarely reveals savings. Kerzner (2017) recommends that estimates be revised as design progresses, and this one will be repriced from contractor bids when design is complete. Fort Wayne Food Works and every quote and rate here are composites for this course.
References
AACE International. (2020). Cost estimate classification system: As applied in engineering, procurement, and construction for the process industries (Recommended Practice 18R-97). AACE International.
Kerzner, H. (2017). Project management: A systems approach to planning, scheduling, and controlling (12th ed.). Wiley.
Project Management Institute. (2017). A guide to the project management body of knowledge (PMBOK guide) (6th ed.). Project Management Institute.
What the BU 442 Unit 2 instructions ask for
In Unit 2, BU 442 asks students to prepare a cost estimate for a project and document its basis. Typical requirements include a line-by-line estimate, the method used for each line, the source of rates or quantities, the assumptions behind each figure, exclusions and a confidence range. Many instructors accept composite rates if they are labeled and plausible. Some ask for three-point values on uncertain items to support contingency later, and others want the estimate tied to a stated design stage so its accuracy can be judged. The estimate is usually presented as a table with explanation, formatted in APA 7. Strong submissions explain differences between this estimate and any earlier figure, since a sponsor will want to know which number to believe and why.
How the BU 442 Unit 2 example is put together
The estimate opens by stating the design stage, the purpose and the idea of a basis of estimates. A fourteen-line table gives each element's cost, method, source, main assumption and, for eight lines, three-point values in thousands. A reading section explains why those lines were chosen and works through the PERT mean for the electrical line. It then reconciles the bottom-up total with the earlier parametric figure. An exclusions section names six items outside the estimate and why. The final section places the estimate in the AACE classification, gives an asymmetric range and explains why renovation ranges lean upward, since old buildings reveal problems more often than savings.
Reading the BU 442 Unit 2 rubric
Cost estimate rubrics generally reward completeness of line items, a clear basis for each line, reasonable assumptions, stated exclusions and an appropriate confidence range, alongside presentation. Completeness earns credit when every part of the scope is priced. The basis criterion, often the heaviest, rewards a method, source and assumption for each line. Assumptions score highest when they identify what would change the figure. Exclusions earn points when named explicitly so they cannot be mistaken for omissions. The confidence range is judged on whether it fits the design stage and explains any asymmetry. Instructors also credit reconciliation with earlier estimates, which shows the student understands how estimates mature as design moves forward and quotes replace allowances.
Common BU 442 Unit 2 mistakes, and how to avoid them
Cost estimates commonly lose points by presenting a list of numbers with no method or source. Another frequent problem is hiding contingency inside line items, which makes later tracking impossible. Students often give a single total with no range, implying false precision. Some forget exclusions, leaving a sponsor to discover missing costs later. Others use three-point values on every line, including fixed fees, which adds work without insight. Estimates that differ from earlier figures without explanation raise doubts about both. Finally, using real rates or quotes from an employer can disclose confidential pricing; labeled composite rates demonstrate the same method safely and let the instructor judge the reasoning rather than the numbers.
Get a BU 442 Unit 2 example written to your instructions
Attach the Unit 2 instructions and your BU 442 rubric, plus the case, the scope description and any template your section requires. We write a custom example that splits quantity from rate, gives every element its own basis line, states assumptions that could fail, lists exclusions and closes on a derived range. First custom sample free, returned in 24 to 48 hours.
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BU 442 Unit 2 questions, answered
Where do the rates come from if the project is invented?
From reasoning you show on the page. Publicly published wage series and vendor list prices can be cited where you genuinely have them, and everything else is a figure you construct and label as case material. What matters to the criterion is that each rate has a visible origin. A number with no stated source reads the same whether it was researched or chosen to make the total look tidy.
How detailed does the estimate need to be?
Detailed enough that every line can be argued with, which is usually fewer elements than a first draft assumes. Twenty lines each carrying a quantity, a rate and a basis beat sixty lines of names and totals. Where the instructions fix a level of decomposition, follow it; where they do not, stop when a further split would produce elements you cannot estimate any better.
Does the basis need to cover every single line?
Every line the reader could question, which in practice means all of them at this level of detail. Where several elements share a method and a source, group them under one basis entry and say which lines it covers rather than repeating the same paragraph. What fails is a basis that covers the large elements and leaves the rest unexplained, since the unpriced assumptions are often in the small ones.
Where can I find a free BU 442 Unit 2 sample paper?
The full BU 442 Unit 2 cost estimate with basis is on this page at no charge, including the fourteen-line table, the three-point values and margin notes. For your own project, forward the prompt and a custom estimate is prepared free, typically within 48 hours.
Where do rates come from in BU 442 Unit 2 if the project is invented?
From labeled composite sources, such as regional cost guides, typical quotes or published fee schedules. The sample names the source type for every line so the reader can see what each figure rests on.