Question

ABC General Contractors ABC General Contractors was an established construction company handling small-to medium- sized commercial and industrial construction projects. Some recent projects that the company had completed were a 20,000-square-foot factory building, a four-story office building, and a water filtration plant. TELEVISION TOWER BID The company was now in the process of preparing a bid for a television station for the erection of a 225-foot-high television antenna tower and the construction of a building adjacent to the tower that would be used to house transmission and electrical equipment. ABC was bidding only on the tower and its electrical equipment, the building, the connecting cable between tower and building, and site preparation. Transmission equipment and other equipment to be housed in the building were not to be included in the bid and would be obtained separately by the television station. The site for the tower was at the top of a hill, with the building to be constructed at a slightly lower elevation than the base of the tower and near a main road. Between the tower and building was to be a crushed gravel service road and an underground cable. Adjacent to the building a fuel tank was to be installed above ground on a concrete slab. PREPARATION OF COST ESTIMATES Prior to preparing the detailed cost estimates, ABC's estimator met with the company's general supervisor to go over the plans and blueprints for the job. In addition to preparing a cost estimate, the estimator was to prepare an estimate of the time it would take to complete the job. The television station management was very concerned about the time factor and it had requested that bids be pre-pared on the basis of the normal time and costs for completing the job and also for the fastest time for completing the job and the additional costs that this would entail. The result of the conference between the estimator and general supervisor was to determine that the activities shown in Table I would be necessary to complete the job. It was agreed that the estimator would prepare time and cost estimates for these activities. In addition to determining the list of activities, the estimator and supervisor discussed in some details how these activities could be sequenced as the list of activities in Table I did not necessarily indicate the order in which the work could be performed. In the course of the discussion, the estimator made the following notes. Survey work and procurement of the structural steel and electrical equipment for the tower can start as soon as contract is signed.

can you please answer question 1 and 3 please

Answer 1

- + + + + + NORMAL RATE

Critical Path: a -f- h- i- v- k- cc- ee
                            5+120+38+8+35+8+5+5 = 224 Days
Working at a normal rate, the job can be completed in 224 Days.

Total Direct Costs = $364,050                           Total Indirect Costs = $600,682.50
   Direct Labor = $206,280                                          65% of Direct Costs = $236,623.50
   Direct Material = $157,770                                     Total Direct Costs = $364,050

Total Contingency Amount = $690,784.87                               10% Profit Bid = $759,863.35
15% of Total Estimated Cost = $90,102.38                           10% of Contingency = $69,078.48
Total Indirect Costs = $600,682.50                                          Contingency Amount = $690,784.87

In order for ABC to obtain a profit of 10% before federal income taxes, they will need to place a bid of $759,863.35.

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