1. With of the five cost categories correspondends to overhead ? Do you agree with the way in which this costs is allocated to individual housing units? Can you suggest a different allocation method? 2. Calculate the selling price of Job 3. Calculate the profit made on the sale of this unit
Sutton Construction Inc is a privately held, family founded corporation on that builds single and multiple - unit housing. Most projects sutton Construction undertakes involve the construction of multiple units. Sutton Construction has adopted a
1. General conditions, including construction site utilities, project insurance permits and licenses, architect fees, decorating, field office salaries, and clean up costs
2. Hard costs, such as subcontractors, direct materials and direct labor
3. Finance costs, including title and recording fees, inspection fees, and taxes and discounts on mortgages
4. Land costs, which refer to the purchases price of the construction site
5. Marketing costs, such as advertising, sales commisions, and appraisal fees
Recently, sutton corporation purchased land for the purposes of developing 20 new single family house. The cost of the land was $25.000. Lot sizes vary from 1/4 to 1/2 acre. The 20 lots occupy a total of eight acres.
General conditions costs for the projected totaled $120.000 is common to all 20 units that were constructed on building site.
Job 3, the third house built in the project, occupied a 1/4 acre lot had the following hard costs:
Direct materials $8.000
Direct labor $6000
Subcontractor $14,000
For job 3, finance costs totaled $4,765 and marketing costs $800. General conditions costs are allocated on the basis of units produced. Each unit's selling price is determined by adding 40% to total of all costs
Required
1. With of the five cost categories correspondends to overhead ? Do you agree with the way in which this costs is allocated to individual housing units? Can you suggest a different allocation method?
2. Calculate the selling price of Job 3. Calculate the profit made on the sale of this unit
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
