---
title: "Compare estimated cost and actual cost"
subject: "Estimating and Costing"
chapter: 1
key: "semester_7/estimating_and_costing:compare-estimated-actual-cost"
source: https://www.bctengineer.com/q/semester_7/estimating_and_costing/compare-estimated-actual-cost
site: BCT Engineering
---

# Compare estimated cost and actual cost

Estimating and Costing · Chapter 1: Introduction

- Asked in: 2081 Baisakh, 3 marks
- Video: [Difference Between Estimating & Costing](https://www.youtube.com/watch?v=mx_aURyUXnI) — AK All Education
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/estimating_and_costing/compare-estimated-actual-cost
- Whole chapter: https://www.bctengineer.com/md/semester_7/estimating_and_costing/chapter-1

## Question

Compare estimated cost and actual cost.

## Short answer

Estimated cost is the probable cost forecast before construction based on drawings and rates, while actual cost is the exact expenditure recorded after completion. Estimated cost includes contingency and serves approval and tendering; actual cost is final, used for payment and cost records.

## Answer

| Basis | Estimated cost | Actual cost |
|---|---|---|
| Meaning | Probable cost calculated before the work | Cost really spent after completion |
| Time | Prepared before execution | Known during/after execution |
| Basis | Drawings, specifications, norms, prevailing rates | Bills, vouchers, measurement book, final account |
| Nature | Forecast, approximate | Fixed, final |
| Accuracy | Depends on data and judgement | Exact |
| Uses | Approval, budget, tender comparison | Payment, cost record, comparison with estimate |
| Variation | May be revised or supplemented | Cannot be changed |
| Includes | Contingency allowance | Contingency only if actually used |

The estimated cost is normally close to the actual cost only when the design is complete and the rates and site conditions do not change.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. When is the estimated cost prepared compared with the actual cost?
   A. Estimated cost before execution; actual cost known during or after execution
   B. Both are prepared before execution
   C. Estimated cost after completion; actual cost before
   D. Both are known only at final account
   Answer: A. Estimate is a forecast; actual cost is known from the work. (Key point: Timing)

2. On what documents is actual cost based?
   A. Drawings and norms
   B. Bills, vouchers, measurement book and final account
   C. Current rates and judgement
   D. Specifications and tender notice
   Answer: B. Actual cost comes from the real records of spending. (Key point: Basis)

3. Which statement is true?
   A. Actual cost may be revised later but the estimate cannot
   B. Both can be freely changed
   C. An estimate may be revised or supplemented but actual cost cannot be changed
   D. Neither includes any allowance
   Answer: C. Actual cost is fixed and final, while the estimate may be revised. (Key point: Variation)

## Related in Estimating and Costing

- [Estimated cost is never the actual cost](https://www.bctengineer.com/question.md?key=semester_7%2Festimating_and_costing%3Aest-cost-never-equal-actual) — Estimating and Costing, chapter 1
- [Estimated cost never actual; data required](https://www.bctengineer.com/question.md?key=semester_7%2Festimating_and_costing%3Aest-cost-never-actual-data) — Estimating and Costing, chapter 1
- [Estimate, quantity survey, estimated vs actual](https://www.bctengineer.com/question.md?key=semester_7%2Festimating_and_costing%3Aestimate-quantity-survey-actual) — Estimating and Costing, chapter 1
- [Purposes of estimating; estimate never actual cost](https://www.bctengineer.com/question.md?key=semester_7%2Festimating_and_costing%3Apurposes-estimate-never-actual) — Estimating and Costing, chapter 1

## Related in other subjects

- [Cost variance analysis from standard and actual](https://www.bctengineer.com/question.md?key=semester_6%2Fengineering_economics%3Acost-variance-analysis-9000-units) — Engineering Economics, chapter 1
- [Present equivalent of fuel costs, actual dollar](https://www.bctengineer.com/question.md?key=semester_6%2Fengineering_economics%3Aactual-dollar-fuel-cost-waste-plant) — Engineering Economics, chapter 8