1.

Green Builders is currently using the Dual Rate method for overhead allocation. The companys 2014 income statement and the University View project direct cost estimation are given below.

As the project manager of University View, how much overhead should you charge on the total project cost?

If you switch a single rate method, how much overhead should you charge on the project?

2.

Which of the following statements is NOT true?

a. (A/F, i , n) is used when you need to find the annuities of a future value.

b. If IRR_B-A>MARR, then AW_B>AW_A.

c. A uniformly decreasing series can be broken into a uniform series subtracting a gradient series.

d. Using NPW, IRR, Payback period criteria, the same alternative will be selected from mutually exclusive alternatives.

Green Builders INC Income Statement University View Direct Costs Material Direct Labor Subcontractor costs Other direct costs $456,000 366,000 615,000 Revenue Construction Cost $ 650,000 4% Material Direct Labor (induding payroll taxes, fringes & Subcontractor costs Other direct costs 247,000 2% 208,000 32,500 1% 0% 0% Total direct costs $1,437,000 Total direct costs 500 3% Gross profit 149,500 1% Overhead Net profit (before taxes) 500 0%