Question
A construction company evaluates its project costs for three different types of costs over four months. Month Projects Completed Total Cost R Cost per Project
A construction company evaluates its project costs for three different types of costs over four months.
| Month | Projects Completed | Total Cost R | Cost per Project R | Total Cost S | Cost per Project S | Total Cost T | Cost per Project T |
|---|---|---|---|---|---|---|---|
| 1 | 5 | $2,500 | $3,500 | $4,000 | |||
| 2 | 10 | $2,500 | $4,500 | $8,000 | |||
| 3 | 3 | $2,500 | $2,200 | $2,400 | |||
| 4 | 8 | $2,500 | $4,200 | $6,400 |
Required: a. Calculate the cost per project for each cost. b. Classify each cost as fixed, variable, or mixed. c. Discuss the effects of each cost behavior on project cost estimation. d. Evaluate how understanding cost behavior can improve project bidding. e. Suggest measures to optimize cost management for future projects.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Part a Calculate the cost per project for each cost Lets calculate the cost per project for each project type R S and T Month Projects Completed Total Cost R Cost per Project R Total Cost S Cost per P...
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Step: 2
Step: 3
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Accounting for Decision Making and Control
Authors: Jerold Zimmerman
9th edition
125956455X, 978-1259564550
