Determine the total estimated cost at completion for the project and the variance for each cost code.
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8. A contractor has a contract to construct the sanitary sewer, water line, storm drain, and street lighting for a new subdivision. The contractor uses the cost codes in Figure 2-6. The original estimate for the sewer was $25,000, and a $3,200 change order has been approved to add a manhole. The sewer work has been completed by the contractor at a cost of $27,365. The original estimate for the waterline was $31,000, and no changes have been made to the budget. The costs to date for the waterline are $31,300 and it is estimated that it will take another $450 to complete the waterline. The water line is being installed by the contractor. The original estimate for the storm drain was $17,000, and no changes have been made to the budget. The contractor has paid $7,236 for materials and estimates that it will cost $9,764 to install the storm drain. The contractor will install the storm drain. The original estimate for the outside lighting was $23,600, and no changes have been made to the budget. The contractor has subcontracted the outside lighting for $23,600. The subcontractor has billed $11,230 for materials. Determine the total estimated cost at completion for the project and the variance for each cost code.
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- 9. A contractor has a contract to remove and replace the existing landscape and sidewalks around an office building. The work includes demolition of the existing landscaping and sidewallks, importing fill and grading around the office building, constructing new concrete sidewalks, and new landscaping. The contractor uses the cost codes in Figure 2-6. The contractor will perform all of the work except placing the site concrete and the landscaping. The original estimate for the demolition was $30,000, and a $5,000 change order has been approved to remove some unexpected debris found during the demolition. The demolition work has been completed at a cost of $33,562. The original estimate for the fill and grading was $17,500 and a $2,000 change order for importing additional fill to replace the debris has been approved. The fill and grading costs to date are $17,264, and the estimated cost to complete has been estimated at $2,236. The original budget for the labor to pour the concrete was…Alpine Company solicited bids from several contractors to construct an addition to its office building. The lowest bid received was for $1,200,000. Alpine decided to construct the addition itself at a cost of $1,100,000. What amount should be recorded in the building account?Two landfill construction plans are being considered by a planning committee.They are:1) Plan A: Landfill with a groundwater protection system.2) Plan B: Landfill constructed with a geosynthetic liner to minimize leachates from the landfill and protectgroundwater sources.Annual amortized capital costs and risks of failure for the systems are presented in the table below:The cleanup cost, if the groundwater system should fail, is estimated to be $8,000,000.a) Determine the annual social cost of failure of each of the two plans.b) Determine to total cost per year for the two plans.c) If minimum total annual cost is the criterion for selecting a option, what plan should be chosen? Clearly justifyyour choice.
- Given the following table, what is the minimum profit and overhead for this project? Description Grading and Excavation Sanitary Sewer Water Line Storm Drain Site Concrete - Labor Site Concrete - Concrete - Outside Lighting O $33,515 $31,485 $29,835 O $25.945 Contract Billed to Date Actual Costs Amount $234,699 $234,699 $57,800 $27,365 $31,750 $16,850 $19,200 $21,265 $23,600 $197,830 Budgeted Costs $59,000 $28,200 $31,000 $17,000 $19,200 $20,900 $23,600 $198,900 Overrun -1,200 -835 750 -150 0 365 0 -1,070Question 9. A contractor has a contract to remove and replace the existing landscape and sidewalks around an office building. The work includes demolition of the existing landscaping and sidewallks, importing fill and grading around the office building, constructing new concrete sidewalks, and new landscaping. The contractor uses the cost codes in Figure 2-6. The contractor will perform all of the work except placing the site concrete and the landscaping. The original estimate for the demolition was $30,000, and a $5,000 change order has been approved to remove some unexpected debris found during the demolition. The demolition work has been completed at a cost of $33,562. The original estimate for the fill and grading was $17,500 and a $2,000 change order for importing additional fill to replace the debris has been approved. The fill and grading costs to date are $17,264, and the estimated cost to complete has been estimated at $2,236. The original budget for the labor to pour the…The following information relates to Contract 6502, which was undertaken for the construction of roadways for the City Council. The total value of the contract was $250,000 and it is at a stage where profits can be attributed to it. Details of the contract are shown in the books: $ Materials sent to site 85,349 Labour engaged on site 74,375 Plant installed at cost 15,000 Direct expenditure 4,136 General overhead charges 3,167 Materials returned to store…
- A company is constructing a new production facility. The following costs have been incurred: Site preparation costs $50,000 Architects’ fees $26,000 Legal fees $10,000 Purchase of site $200,000 Costs incurred to relocate employees to the new facility $30,000 Administration costs $50,000 Total costs $366,000 The architects’ fees relate to the design of the new facility and the legal fees relate to legal advice received on the contract to purchase the site. The total value that should be recognized as Property, Plant and Equipment for the new facility should be Question 10Answer a. $ 314,000 b. $ 324,000 c. $ 344,000 d. $ 286,000East and West Construction has undertaken the construction of a bridge over the River Till for the Campton Council. The value of the contract is $125,000 and it is at a stage where profits can be attributed to it. When work was certified, Campton Council was sent an invoice for progress payment. The contractors have given the contract number 86 for reference, and the following are the details as shown in the books: Labour on site Materials direct to site, less returns Materials from store and workshops Plant Upkeep Account-hire and use of plant Direct expenses General overhead apportioned to this contract Materials on hand November 30 Wages accrued at November 30 Direct expenses accrued Value of work certified by the council's surveyor Cash received on account Required: $ 40,500 42,000 8,120 1,210 2,300 3,710 630 780 160 110,000 88,000 (a) Prepare the contract 86 account as at November 30th 2011. (b) Prepare the contract P&L account for the year ended November 30th 2011.In connection with surfacing a new highway, a contractor has a choice of two sites on which to set up the asphalt- mixing plant equipment. The contractor estimates that it will cost $1.25 per cubic yard mile (yd³ -mile) to haul the asphalt-paving material from the mixing plant to the job location. Factors relating to the two mixing sites are as follows: Cost Factor Average hauling distance Monthly rental of site Cost to set to and remove equipment Hauling expense Flagperson Site A 6 miles $1,200 $17,000 $1.25 / yd³ -mile Not required Site B 4.3 miles $5,500 $25,000 $1.25 / yd³ -mile $96 / day The job requires 50,000 cubic yards of mixed-asphalt-paving material. It is estimated that four months (17 weeks of five working days per week) will be required for the job. Compare the two sites in terms of their total costs. Assume that the cost of the return trip is negligible. A) Which is the better site? B) For the selected site, how many cubic yards of paving material does the contractor…
- Columbia Company incurred the following expenditures related to the land and building: Payment for land and old building 1,750,000 Demolition of old building to prepare the land for the construction of a new building 87,500 Payment to tenants for vacating old building 26,250 Building permit for new construction 52,500 Surveying fee before construction of new building 35,000 Parking lots and driveways (part of building plan) 70,000 Cost of grading, leveling and landfill 78,750 Assessment by city for drainage project 8,750 Construction costs of new building 10,500,000 Temporary quarters for…The Tennessee Department of Highways is trying to decide whether it should “hot-patch” a short stretch of an existing highway or resurface it. If the hotpatch method is chosen, approximately 500 cubic meters of material would be required at a cost of $800/cubic meter (in place). If hot-patched, the shoulders will have to be improved at the same time at a cost of $24,000. The shoulders must be maintained at a cost of $3000 every 2 years. The annual cost of routine maintenance on the patched road is estimated to be $6000. Alternatively, the state can resurface the road at a cost of $500,000. If maintained properly, at a cost of $2000 per year beginning in the second year, the surface will last for 10 years. The shoulders would require reworking at the end of the fifth year at a cost of $15,000. Regardless of the method selected, the road will be completely rebuilt in 10 years. At an interest rate of 9%, which alternative should be chosen?Texas Co. purchased land as a factory site for $1,500,000. Texas paid $200,000 to tear down two buildings on the land. Legal fees of $10,000 were paid for title investigation and making the purchase. Architect's fees were $40,000. Title insurance cost $5,000, and liability insurance during construction cost $4,000. Excavation cost $20,000. The contractor was paid $4,000,000. An assessment made by the city for pavement was $20,000. Interest costs during construction were $200,000. The cost of the land that should be recorded by Texas Co. is?