When a company constructs a building, the cost of the building includes materials and labor but not design fees, building permits, or insurance during construction. a. True
b. False

False.

Explanation:

Construction costs can be defined as the overall costs associated with the development of a built asset, project or property. The construction costs is classified into two (2) main categories and these are;

1. Operational costs: these include the costs on daily basis during the construction process such as rent, wages, sales, utility bills, maintenance and repair fees etc.

2. Capital costs: these include the costs incurred in the acquisition of the property such as commissions, insurance, property acquisition, materials, inflation, fittings, equipment, labor etc.

Hence, when a company constructs a building, the cost of the building includes materials and labor as well as the design fees, building permits, or insurance during construction.

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