A construction company is planning their projects for the year 2023. The company is considering the construction of 18 buildings, each is 2,900 m². In 2018, they have built similar buildings but with smaller areas, and the material costs associated with those buildings are shown in the following table: Building # 1 2 3 4 5 6 7 8 Area (m²) 1,430 1,475 1,655 1,790 1,961 2,015 2,375 2,533 Cost (S) 311,812 313,744 331,893 339,479 356,153 359,265 383,146 385,265 +
A construction company is planning their projects for the year 2023. The company is considering the construction of 18 buildings, each is 2,900 m². In 2018, they have built similar buildings but with smaller areas, and the material costs associated with those buildings are shown in the following table: Building # 1 2 3 4 5 6 7 8 Area (m²) 1,430 1,475 1,655 1,790 1,961 2,015 2,375 2,533 Cost (S) 311,812 313,744 331,893 339,479 356,153 359,265 383,146 385,265 +
Chapter2: Loads On Structures
Section: Chapter Questions
Problem 1P
Related questions
Question
![Problem 4
A construction company is planning their projects for the year 2023. The company is considering
the construction of 18 buildings, each is 2,900 m². In 2018, they have built similar buildings but
with smaller areas, and the material costs associated with those buildings are shown in the
following table:
16
OL
O
^
6
7
17
i
♫+
The materials cost index values are as shown in the following table:
Cost index
321
332
348
368
379
398
406
&
(
Building #
1
2
7
3
4
a
V
5
6
7
8
18 144
f8
TY! U
*
Year
2017
2018
Area (m²)
1,430
1,475
2019
2020
2021
2022
2023
fg
00
1,655
1,790
1,961
2,015
2,375
2,533
THE UNIVERSITY OF
8
▷II
A
myhp
NO
(
+
Cost ($)
311,812
313,744
331,893
339,479
f10 DPI
356,153
359,265
383,146
385,265
9
A
fm
H
¡1
O
X
*****
O
B
f12
P
慢
XI
ins
prt sc
=
S
C
←
de
bac](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbcee9e29-08e2-4328-ab08-5223bc922d01%2F5b29adcb-5b8e-4bd1-93ef-afd022aaaafe%2Frpeowxb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 4
A construction company is planning their projects for the year 2023. The company is considering
the construction of 18 buildings, each is 2,900 m². In 2018, they have built similar buildings but
with smaller areas, and the material costs associated with those buildings are shown in the
following table:
16
OL
O
^
6
7
17
i
♫+
The materials cost index values are as shown in the following table:
Cost index
321
332
348
368
379
398
406
&
(
Building #
1
2
7
3
4
a
V
5
6
7
8
18 144
f8
TY! U
*
Year
2017
2018
Area (m²)
1,430
1,475
2019
2020
2021
2022
2023
fg
00
1,655
1,790
1,961
2,015
2,375
2,533
THE UNIVERSITY OF
8
▷II
A
myhp
NO
(
+
Cost ($)
311,812
313,744
331,893
339,479
f10 DPI
356,153
359,265
383,146
385,265
9
A
fm
H
¡1
O
X
*****
O
B
f12
P
慢
XI
ins
prt sc
=
S
C
←
de
bac
![16
In the past couple of years, the company began constructing the larger units (2,900 m² units
compared to those in 2018 as shown in the first table). The labor hours required to complete the
first 2,900 m² unit back then was 24,000 hours but the labor hours decreased exponentially with
time due to the experience gained by workers at a 90% learning slope until reaching the 15th unit,
after which a steady-state was reached. Assume the 2023 average labor wage is $20 per hour and
the Company's fixed annual cost (overhead) is $2,300,000.
(a) What is the breakeven selling price per unit?
(b) What is the selling price per unit assuming the company wishes to earn 10% profit on top of
the total costs incurred?
6
1
Y
♫+
&
7
fg
V
।বব
U
*
6
8
DII
A
+
f10
DDI
9
P
prt sc
S
(¹)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbcee9e29-08e2-4328-ab08-5223bc922d01%2F5b29adcb-5b8e-4bd1-93ef-afd022aaaafe%2Fnkaj2p8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:16
In the past couple of years, the company began constructing the larger units (2,900 m² units
compared to those in 2018 as shown in the first table). The labor hours required to complete the
first 2,900 m² unit back then was 24,000 hours but the labor hours decreased exponentially with
time due to the experience gained by workers at a 90% learning slope until reaching the 15th unit,
after which a steady-state was reached. Assume the 2023 average labor wage is $20 per hour and
the Company's fixed annual cost (overhead) is $2,300,000.
(a) What is the breakeven selling price per unit?
(b) What is the selling price per unit assuming the company wishes to earn 10% profit on top of
the total costs incurred?
6
1
Y
♫+
&
7
fg
V
।বব
U
*
6
8
DII
A
+
f10
DDI
9
P
prt sc
S
(¹)
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