Construction Accounting And Financial Management (4th Edition)
Construction Accounting And Financial Management (4th Edition)
4th Edition
ISBN: 9780135232873
Author: Steven J. Peterson MBA PE
Publisher: PEARSON
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Chapter 4, Problem 9P
To determine

Ascertain the estimated cost at completion of project and variance for each cost.

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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…
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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…
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