A contractor has the following historical costs, expressed in $106, for the last 4 years: Cp...

 

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A contractor has the following historical costs, expressed in $106, for the last 4 years: Cp (Cost of Production) Co (Office overhead) Cj (Job overhead) $240 m $12 m $7.0 m $320 m $14 m $5.6 m $280 m $13 m $8.0 m $300 m $15 m $7.6 m Year 1 2 3 4 a) Calculate office and job overhead rates Ro-Co/Cp and Rj=Cj/Cp, and determine the rates (i.e. Ro and Rj) for year 5. (Hint: Use linear regression to estimate Ro and Rj for year 5). b) If in year 5 a project is estimated to have a direct labor and material cost of $150 million, then calculate the total overhead amount. A contractor has the following historical costs, expressed in $106, for the last 4 years: Cp (Cost of Production) Co (Office overhead) Cj (Job overhead) $240 m $12 m $7.0 m $320 m $14 m $5.6 m $280 m $13 m $8.0 m $300 m $15 m $7.6 m Year 1 2 3 4 a) Calculate office and job overhead rates Ro-Co/Cp and Rj=Cj/Cp, and determine the rates (i.e. Ro and Rj) for year 5. (Hint: Use linear regression to estimate Ro and Rj for year 5). b) If in year 5 a project is estimated to have a direct labor and material cost of $150 million, then calculate the total overhead amount.