Exercise 5-25 Methods of Estimating Costs: Engineering Estimates (LO 5-2) Custom
ID: 2639171 • Letter: E
Question
Exercise 5-25 Methods of Estimating Costs: Engineering Estimates (LO 5-2)
Custom Home builders (CH) designs and constructs high-end homes on large lots owned by customers. CH has developed several formulas, which it uses to quote jobs. These include costs for materials, labor, and other costs. These estimates are also dependent on the region of the country a particular customer lives. Below are the cost estimates for one region in the Midwest:
Custom Home builders (CH) designs and constructs high-end homes on large lots owned by customers. CH has developed several formulas, which it uses to quote jobs. These include costs for materials, labor, and other costs. These estimates are also dependent on the region of the country a particular customer lives. Below are the cost estimates for one region in the Midwest:
Explanation / Answer
Building costs = $150 x 3,000 square feet = $450,000
Administrative costs $20,000 Building costs - per square foot (moderate) 450,000 Appliances (moderate) 25,000 Utilities cost (if required) 40,000 Estimated cost $535,000