Questions and Answers of Construction Accounting

What are some reasons that you may drop a customer?
In Figure 2-8, why was equipment repairs and maintenance broken down into repairs, maintenance, and tires?Figure 2-8 ###.##.#####A JOB- PHASE COST CODE COST TYPE- FIGURE 2-8 Sample Job Cost Code
What are the three ways that job-based profit centers may be evaluated? Why might a company choose to do more work in a job type that had a lower gross profit margin?
Create a work on hand worksheet like the one in Figure 4-3. 1234567 7 A 4 Job 8 B C D E Total Current Estimated Estimated Contract Cost at Profit # Job Name Amount Completion (C-D) LL F H I
Create a committed cost spreadsheet like the one in Figure 4-1. 123456 A 789 B 6 Code Description C D E Total Original Change Estimate Estimate Orders (C+D) FL Committed Costs G H Non-
Determine the estimated cost of the work performed each week given the tasks—with their associated costs and schedules—shown in Table 7-4. When a task spans more than one week, the costs should
Determine the annual budget for office utilities the data from the past 12 months shown in Figure 9-7. Utility costs are expected to increase by 8% per year due to inflation. None of the company’s
You have been running a construction company out of your home with your spouse helping you keep the books. The company has grown and has begun to take up too much of your and your spouse’s time.
Determine the annual budget for office utilities using the data from the past 12 months shown in 7. Utility Figure 9-osts are expected to increase by 7% per year due to inflation. The company is
Prepare a depreciation schedule to be used for tax purposes for a $110,000 railroad spur (track) using the convention. The equipment was placed in service during the second quarter of the
In 2018, your company purchased a front-end loader for $150,000, a dump truck for $85,000, and a dumping trailer for the dump truck for $38,000. The front-end loader was placed in service in
Visit your institution’s library and find out what sources of information are available about typical financial ratios for construction companies. What are the typically financial ratios for a
Mt. Ogden Homes started out five years ago building a few homes a year. During the last few years, they have experienced rapid growth and expect to build 50 to 60 homes next year. Although the number
How does employee turnover affect the labor burden costs?
What are the two types of general overhead budgets and how are they different?
You are preparing a general overhead budget to be used to project your company’s annual cash flow. How would you handle the depreciation of the owner’s truck?
Why must meals and entertainment be kept separate in the general overhead?
Why is 06110 Rough Carpentry separate from 06120 Lumber in the job cost codes found in Figure 2-6? Code Description 01000 GENERAL REQUIREMENTS 01100 Supervision 01400 General Labor 01600 Temporary
Why are fixed costs fixed only over a specified region?
Determine the projected costs for utilities in year 5. The inflation rate has been determined to be 0.032 and the initial cost is $57.39.
How can specializing in a market segment help improve a company’s profitability?
What are some of the ways a company can increase its pretax profit margin?
What are some of the ways a company can increase its contribution margin?
What are the pros and cons of raising prices?
How can the estimator increase the profit the company makes on a project?
A construction company is negotiating on a construction project with a six-month duration. On the last day of each month the construction company may bill the owner for the work completed during the
How can the project management team increase the profit the company makes on a project?
A construction company is bidding on a contract to build homes for a developer. The project consists of two types of homes and is scheduled to begin in September. The expected monthly housing starts
What are the six ways to allocate overhead to profit centers? Which would you use to allocate inventory costs? Which would you use when looking at eliminating a profit center?
A construction company is negotiating on a construction project with a six-month duration. On the last day of each month the construction company may bill the owner for the work completed during the
Why is it important for profit center managers to have the authority and resources to run the profit center?
How can a company be profitable and still fail financially?
How does subcontracting out labor that would normally be performed in-house affect the cash flow for a construction project?
Why should the profit and overhead markup on the project be included when calculating the cash needs for a construction project?
When does the greatest need for cash occur on a construction project?
How does the rate of progress on a project affect the project’s need for cash?
How does retention affect the project’s need for cash?
How can the cash needs of a project be reduced?
Your company needs to purchase a new track hoe and has narrowed the selection to two pieces of equipment. The first track hoe costs $100,000 and costs $32.00 per hour to operate. The second track hoe
How can fluctuations in taxable income affect the NPV?
What uniform series of cash flows is equivalent to a $150,000 cash flow occurring today if the uniform series of cash flows occur at the end of each month for he next 15 years and the periodic
Determine the monthly cash flows and total cash generated at the end of each month and just before the payment is received for the construction of a house with the budget and schedule shown in Table
Prepare a cash flow projection for a construction company that currently has two projects under contract for the next year and anticipates picking up a third and fourth project during the year. The
How does the choice of company type affect the taxes of a company?
In general, how are taxable income losses handled?
What is the difference between effective tax rate and marginal tax rate?
How does depreciation affect taxes?
Using a tax rate of 21%, determine the amount of federal income tax that is due for a C corporation that has a taxable income of $356,000.
Draw a cash flow diagram for the cash flows in Table 15-3. Year Receipts ($) Disbursements ($) 0 1 0 1,000 0 4,750 2 2,000 0 3 2,000 0 4 1,000 0
Your company paid employees who were eligible for work opportunity credit $25,000 last year. Of these wages, $21,000 is eligible for a tax credit of 40% of the wages. The remaining wages are eligible
What are the five steps for developing a cash flow for a construction company?
What are the advantages of using a spreadsheet to develop a cash flow for a construction company?
In Example 14-4, how did depreciation affect the cash flow for the construction company? Example 14-4 The new computer system, included in the general overhead budget, will be
What is a “What if” analysis?
What is a “Sensititive” analysis?
On what three things is equivalence based?
What are the characteristics of a uniform series of cash flows?
How do you find the interest rate at which two or more cash flows are equivalent?
What does it mean that equivalence is independent of the time period chosen to evaluate equivalence?
How does inflation affect interest rates?
How do taxes on interest affect the growth of money?
What uniform series of cash flows is equivalent to a $100,000 cash flow, 15 years from now, if the uniform cash flows occur at the end of the year for the next 15 years and the periodic interest rate
How much money needs to be set aside today to purchase a new piece of equipment in three years? The money is expected to earn 9% interest compounded annually, the marginal tax rate is 28%, and the
How do closing costs affect the effective interest rate?
What does it mean when a bank discounts interest?
What is a sunk cost? How should sunk costs be handled when making decisions?
Determine the APY for an APR of 10% for quarterly and monthly compounding periods.
What is trade financing?
Why is it important to compare all possible mutually exclusive alternatives rather than making a series of independent decisions when using quantitative methods to analyze alternatives?
What is a study period? Why must all of the alternatives have the same study period?
What factors should you take into account when selecting the MARR?
Determine the APY for an APR of 7% for quarterly and monthly compounding periods.
Why do the NPV, the future worth, and the annual equivalent select the same alternative?
What types of investments does the payback period without interest and payback period with interest favor?
Why would one use the capital recovery with return method?
Why must you use mutually exclusive alternatives when using the rate of return method?
What are the weaknesses of the payback period without interest?
What is the advantage of using the project balance method?
Your company is looking at purchasing a dump truck at a cost of $65,000. The truck would have a useful life of five years. At the end of the fifth year the salvage value is estimated to be
Your company has $100,000 to invest and has identified the following three investments: Investment A requires an initial investment of $70,000 and has an annual rate of return of 15%. Investment B
Your company has $200,000 to invest and has identified the following three investments: Investment A requires an initial investment of $130,000 and has an annual rate of return of 12%. Investment B
How does depreciation change the NPV?
How do capital gains affect the NPV?
How do tax credits affect the NPV?
How do taxable losses carried forward affect the NPV?
Your company needs to purchase an impact attenuator vehicle to protect crews and equipment during road striping, crack sealing, and other roadwork operations. The impact attenuator vehicle is
Your company has purchased a new track hoe for $100,000. The track hoe can be billed out at $105.00 per hour, has an hourly operation cost of $33.00 and a useful life of four years. At the end of
What can a company do to reduce its workers’ compensation insurance costs?
What is general overhead?
What is the “do nothing” alternative?
Why would a lender require that a line of credit be paid off for one or two months of the year?
What is a commitment fee and how does it affect the interest rate on a line of credit?
What is a compensating balance and how does it affect the interest rate on a line of credit?
What is a good faith estimate?
What is an amortization schedule?
What is maturity matching?
What is the purpose of a subordination clause in a loan?
What is the difference between fixed and variable interest rates?
What is the difference between a secured and unsecured debt?
What is the difference between an allowance and a reimbursement? How does this difference affect labor burden?

Showing 1 - 100 of 145