The Prime constructors are working on a new construction project. At the different stages of the construction project, the cost incurred on the project at the scheduled time is calculated to monitor the expenditure and cost on an agreed cyclic basis. The work schedule for completion of the construction project is 40%. The details of the budget plan are provided to you as below, and you are required to perform calculations and answer the questions in the space provided to you.

The total planned budget details are as follow:

• The budget for your project is $100000
• The work schedule for completion is 40%
• Corresponding scheduled projected amount incurred should also be 40%
• Total number of hours estimated till 40% completion is 400 hours
• Direct labour cost per hour is $25 per hour
• Total amount spent upon quantities is $25000
• Overhead cost is $5000

But due to factors such as:

• Inflation in input supply prices
• The maintenance cost of the equipment’s
• Delays in supplies

Has contributed to the excess spending ion the project.

Now, the actual quantities produced, and amounts used are as follow:

• Total number of hours estimated till 40% completion is 400 hours
• Direct labour cost per hour is $25 per hour
• Total amount spent upon quantities is $28000
• Maintenance cost is $3000
• Overhead cost is $5000

In this task, you are required to:

• Implement processes to monitor actual expenditure
• Monitoring the cost incurred on the project at this scheduled time and measuring the cost variations.
• Modification in the contingency plans
• Report the revised budget to the higher authority such as your immediate manager. If you are not working in the industry, your trainer will act as your immediate manager.

Based on the scenario, perform the following calculations and give answers to the following questions:

Question 1: How would you monitor and manage the actual expenditure. Answer in 50-100 words.

Question 2: Identify the variations by calculating the cost variations and expenditure overruns.

Question 3: Based on the scenario, fill the template given below recommending the revised contingency plan:

Risks	Examples	Risk control
Equipment failure
Delay in supplies
Price and cost changes for the material

Question 4: How much will be the revised budget?

Question 5: List any seven (7) accounting principles used to monitor and modify contingency plans.