A contractor has a job which should be completed in 100 days. At present, he has 80 men on the job and it is estimated that they will finish the work in 130 days. Of the 80 men, 50 are each paid ₱ 120.00 a day, 25 at ₱ 180.00 a day, and 5 at ₱ 250.00 a day. For each day beyond the original 100 days, the contractor has to pay ₱ 500.00 liquidated damages.

A contractor has a job which should be completed in 100 days. At present, he has 80 men on the job and it is estimated that they will finish the work in 130 days. Of the 80 men, 50 are each paid ₱ 120.00 a day, 25 at ₱ 180.00 a day, and 5 at ₱ 250.00 a day. For each day beyond the original 100 days, the contractor has to pay ₱ 500.00 liquidated damages.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter3: Accounting For Labor

Section: Chapter Questions

Problem 15E

See similar textbooks

Similar questions

A building constructor has a contract which will expire in 50 days. He has 80 men on the job and can finish the job in 80 days. The wage per day of 40 men is P800.00 each and that of the other 40 men is P500.00 each for 8 hours work per day. The fine or liquidated damages for delay in the work is P15,000.00 per day. How many more men should the contractor add in order to enable him to complete the work on time? Assuming that the additional men to be added will be paid P500.00 per day, will the contractor save money by employing enough men for him to complete the work on time or by not adding more men and paying the fine? How much is the savings, if any? No overtime work is permitted
On January 1, 20x6, BUNNY, a real estate company, entered into a contract to construct a subdivision on a piece of land it has acquired and, when construction is complete, to deliver the finished houses to their customers. The following information pertains to the said contract each customer is to sign. Each house costs P4,000,000 each (a total of 10 houses are to be constructed). Construction will take 2 years to complete. Payment terms are 50% by the end of the 1" year, 25% at the end of the 2nd year and the balance will be paid after 3 months from the final turn-over. The client can transfer the contract to another, should they not feel satisfied with the house on or before the house is 50% complete. The company incurred the following expenses for 20x6. Total cost of land - P2M; Estimated total cost of construction - P25M, (including the costs for the common areas, streets and light posts amounting to P5M); Estimated total cost of contract for the 10 houses-P40M; In CY 20x5, total…
On January 1, 20x6, BUNNY, a real estate company, entered into a contract to construct a subdivision on a piece of land it has acquired and, when construction is complete, to deliver the finished houses to their customers. The following information pertains to the said contract each customer is to sign. Each house costs P4,000,000 each (a total of 10 houses are to be constructed). Construction will take 2 years to complete. Payment terms are 50% by the end of the 1 year, 25% at the end of the 2nd year and the balance will be paid after 3 months from the final turn-over. The client can transfer the contract to another, should they not feel satisfied with the house on or before the house is 50% complete. The company incurred the following expenses for 20x6. Total cost of land-P2M; Estimated total cost of construction - P25M, (including the costs for the common areas, streets and light posts amounting to PSM); Estimated total cost of contract for the 10 houses - P40M; In CY 20x6, total…
On January 1, 20x6, BUNNY, a real estate company, entered into a contract to construct a subdivision on a piece of land it has acquired and, when construction is complete, to deliver the finished houses to their customers. The following information pertains to the said contract each customer is to sign. Each house costs P4,000,000 each (a total of 10 houses are to be constructed). Construction will take 2 years to complete. Payment terms are 50% by the end of the 1" year, 25% at the end of the 2nd year and the balance will be paid after 3 months from the final turn-over. The client can transfer the contract to another, should they not feel satisfied with the house on or before the house is 50% complete. The company incurred the following expenses for 20x6. Total cost of land – P2M; Estimated total cost of construction – P25M, (including the costs for the common areas, streets and light posts amounting to P5M); Estimated total cost of contract for the 10 houses - P40M; In CY 20x6, total…
An engineer failing to complete his first building contract worth P70,000 in a specified time is compelled to pay a penalty of 1/2 of 1% per day for the first 6 days of extra time required, and for the each additional day thereafter, the stipulated penalty is increased by 10% of P35.00 each day. If he pays the total penalty of P6,160, by how many days did he overrun his contract time? O 14 O 12 06 8
On January 1, 20x6, BUNNY, a real estate company, entered into a contract to construct a subdivision on a piece of land it has acquired and, when construction is complete, to deliver the finished houses to their customers. The following information pertains to the said contract each customer is to sign. Each house costs 4,000,000 each (a total of 10 houses are to be constructed). Construction will take 2 years to complete. Payment terms are 50% by the end of the 1st year, 25% at the end of the 2nd year and the balance will be paid after 3 months from the final turn-over. The client can transfer the contract to another, should they not feel satisfied with the house on or before the house is 50% complete. The company incurred the following expenses for 20x6. Total cost of land- 2,000,000 Estimated total cost of construction - 25,000,000 (including the costs for the common areas, streets and light posts amounting to 5,000,000); Estimated total cost of contract for the 10 houses -…
On January 1, 20x6, Bad, a real estate company, entered into a contract to construct a subdivision on a piece of land it has acquired and, when construction is complete, to deliver the finished houses to their customers. The following data pertains to the said contract each customer is to sign. Each house costs $4,000,000 each (a total of 10 houses are to be constructed). Construction will take 2 years to complete. Payment terms are 50% by the end of the 1st year, 25% at the end of the 2nd year and the balance will be paid after 3 months from the final turn-over. The client can transfer the contract to another, should they not feel satisfied with the house on or before the house is 50% complete. The company incurred the following expenses for 20x6. Total cost of land - $2,000,000; Estimated total cost of construction - $25,000,000, (including the costs for the common areas, streets and light posts amounting to $5,000,000); Estimated total cost of contract for the 10 houses -…
A contractor failing to complete his contract worth P700,000 in a specified time is compelled to pay the penalty of ½ of 1% per day for the first 6 days of the extra time required, and for each additional day thereafter, the stipulated penalty is increased by 10% each day. If he pays a total penalty of P61,600 by how many days did he overrun his contract time?
On January 1, 2016, BUNNY, a real estate company, entered into a contract to construct a subdivision on a piece of land it has acquired and, when construction is complete, to deliver the finished houses to their customers. The following information pertains to the said contract each customer is to sign. Each house costs P4,000,000 each (a total of 10 houses are to be constructed), Construction will take 2 years to complete. Payment terms are 50% by the end of the 1" year, 25% at the end of the 2 year and the balance will be paid after 3 months from the final turn-over. The client can transfer the contract to another, should they not feel satisfied with the house on or before the house is 50% complete. The company incurred the following expenses for 20x6,Total cost of land ~ P2M; Estimated total cost of construction ~ P25M, (including the costs for the common areas, streets and light posts amounting to P5M); Estimated total cost of contract for the 10 houses ~ P40M; In CY 20x6, total…
Jeff Heun, president of Pina Always, agrees to construct a concrete cart path at Dakota Golf Club. Pina Always enters into a contract with Dakota to construct the path for $184,000. In addition, as part of the contract, a performance bonus of $36,400 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $9,100 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 55% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 15% probability that he will be 2 weeks late. Determine the transaction price that Pina…
Jeff Heun, president of Concrete Always, agrees to construct a concrete cart path at Dakota Golf Club. Concrete Always enters into a contract with Dakota to construct the path for $200,000. In addition, as part of the contract, a performance bonus of $40,000 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $10,000 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 55% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 15% probability that he will be 2 weeks late. Instructions a. Determine the transaction…
You were delayed for 13 days from date of delivery time. A standard liquidated damages (LD) is imposed on you. Compute how much are you going to receive in your final billing if your contract amount is Php 3.5 million.