Tennessee Business and Law Practice Exam 2025 - Free Business and Law License Practice Questions and Study Guide

Material consumption refers specifically to the amount of materials used during the construction or manufacturing process; it is not a direct cost but rather a measure related to how efficiently materials are utilized. When estimating costs, companies typically focus on the procurement costs associated with materials and labor inputs required for a project.

Material costs and labor costs are direct components included in cost estimation, as they represent the expenses necessary to acquire materials and pay workers. Overhead costs can also be a part of the overall estimation as they encompass indirect costs associated with the project, such as utilities, rent, and administrative expenses.

In summary, while the estimation process considers material costs, labor costs, and overhead costs, material consumption does not directly impact the initial cost estimation but rather serves as a metric for evaluating efficiency in material use.