CASE DATA At the present time, American marks-up total direct cost using the 10+

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CASE DATA At the present time, American marks-up total direct cost using the 10+ 10 rule. The management d costs are ins1 construction projects and that the rule adequately marks-up time and material workThe management team questions this policy. In light of last year's loss and the expected decrease in sales for the budget period, the management team wants to Tighten up" the cost estimating process to make it as accurate as possible. The following budget for the company and for each profit center is found in Table 7.6 Table 7.6 Company and profit center budgets IR CNW 8,500.0100. 12.125,000! 25.001 425,000! 100.00 43A0 O 16.00 535 500 9 00 5 000 100.00 5950,000 70.00 2.125,000 25.00 425000 Cost of Construction 527,000 24.80 297,500 70.00 Labor Material 0 37 00 2 059 975 34 62 1085 025 51.06 01 000 Other Direct Cost 170,000 2.00 00 2.86 0 0.00 7.225,000 85.00 5,315,475 89.34 1,612,025 75.86 297,500 70.00 Total Direct Cost Gross Profit Expense Variable ble Operating Expense 127.500 150 25,500 0.43 71,400 Auto and Truck Communications Insurance (Work-in Interest (Work-in-progress Other Variable Expense 51.000 0.60 10.200 2.88 3.500 0.82 28,560 100,255 168 81,050 481,950 5.67 210,390 3.54 204,225 12,240 -progre 850001 1.001 62535 105 1896 62.535 1.05 18 965 ss 4.74 850 0.20 67,335 15.84 201,450 2.3 20,145 17,000 0.20 6 Total Variable Expense Fixed 2,363 0.04 6,000 0.07 2000 0.85 3,0000.04 1,313 0.31 4.07 0.09 8,160 1.92 4,800 1.13 Contibutions 14,4000.24 40,320 375 Depreciation (Buildin Insurance (Auto and Truck) Interest (Auto and Truck Rent Salaries 6.800 0.1119,040 0.07 11,200 22,893 0.38 18,507 4.06 86,250 0.14 3,000 538,000 6.33 302,605 5.09 181,017 1,019,950 1.00 512,995 8.62 385,242 255,050 3.00 121,530 2.04 127.733 20,000 0.24 4,000 0 46,0000.542 345,000 4.06 241 4,6001.08 17,250 4.06 | 6001014 her Fixed Expense 12000 0.14 121.713 28.64 5,7881.36 et Profit (before tax)

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