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 sidewalks, importing fill
Question:
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 sidewalks, 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 http://imgur.com/a/Lb366.
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 cost to complete has been estimated at $2,236. The original budget for the labor to pour the concrete was $19,200 and no changes have been made. The concrete labor has been subcontracted out for $19,200, for which the contractor has received a bill for $15,200. The original budget for the concrete for the sidewalks was $9,900 and no changes have been made. The contractor has spent $7,425 for concrete and estimates that $1,950 of concrete will be needed to complete the project. The original estimate for the landscaping was $37,500 and no changes have been made. The landscape work has been subcontracted out for $37,500. The landscaping work has yet to start and no bills have been received.
Determine the total estimated cost at completion for the project and the variance for each cost code.
Just in case the image doesnt show here is a link http://imgur.com/a/Lb366
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Karen April 14, 2023 в 12:34The total estimated cost at completion for the project can be calculated by adding up the actual costs incurred for each cost code and adding the estimated costs to complete for each cost code. Demolition: Original Estimate: $30,000 Change Order: +$5,000 Actual Cost: $33,562 Fill and Grading: Original Estimate: $17,500 Change Order: +$2,000 Actual Cost: $17,264 Estimated Cost to Complete: $2,236 Concrete Labor: Original Estimate: $19,200 Actual Cost: $15,200 Concrete Sidewalks: Original Estimate: $9,900 Actual Cost: $7,425 Estimated Cost to Complete: $1,950 Landscaping: Original Estimate: $37,500 Actual Cost: $0 Estimated Cost to Complete: $37,500 Adding up all of these costs, the total estimated cost at completion for the project is: $33,562 + $17,264 + $2,236 + $15,200 + $7,425 + $1,950 + $37,500 = $115,137 To find the variance for each cost code, we can calculate the difference between the original estimate and the actual cost incurred, as well as the difference between the original estimate and the estimated cost to complete for each cost code. Demolition: Original Estimate: $30,000 Actual Cost: $33,562 Variance: -$3,562 Fill and Grading: Original Estimate: $17,500 Actual Cost: $17,264 Estimated Cost to Complete: $2,236 Variance: +$236 (for actual cost), -$15,736 (for estimated cost to complete) Concrete Labor: Original Estimate: $19,200 Actual Cost: $15,200 Variance: +$4,000 Concrete Sidewalks: Original Estimate: $9,900 Actual Cost: $7,425 Estimated Cost to Complete: $1,950 Variance: +$2,475 (for actual cost), -$7,950 (for estimated cost to complete) Landscaping: Original Estimate: $37,500 Actual Cost: $0 Estimated Cost to Complete: $37,500 Variance: -$37,500 (for actual cost), $0 (for estimated cost to complete) Therefore, the variances for each cost code are: Demolition: -$3,562 Fill and Grading: +$236 (for actual cost), -$15,736 (for estimated cost to complete) Concrete Labor: +$4,000 Concrete Sidewalks: +$2,475 (for actual cost), -$7,950 (for estimated cost to complete) Landscaping: -$37,500 (for actual cost), $0 (for estimated cost to complete)
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