Practical Construction Accounting And Financial Management 1st Edition Yunfeng Chen, Frederick Barnes Muehlhausen - Solutions

Discover the ultimate resource for understanding "Practical Construction Accounting And Financial Management 1st Edition" by Yunfeng Chen and Frederick Barnes Muehlhausen. Access a comprehensive collection of solved problems and step-by-step answers with our detailed solution manual and answers key. Whether you're looking for chapter solutions or an entire test bank, our online platform provides all the textbook answers you need in a convenient solutions PDF. Perfect for students and instructors alike, our instructor manual offers clear guidance. Enjoy free download options for seamless access to questions and answers, ensuring your success in mastering complex concepts.

What is the expected change in the cash balance from the beginning to the end of the budget period?
In what month will the loan be paid in full (less interest)?
What is the forecasted month and amount when payback can occur?
What is the forecasted amount to be borrowed throughout the budget period?
What is the forecasted month and amount when borrowing occurs?
List and explain possible ways a company can improve or manage its cash flow. Ideas should include speeding up the collection of accounts receivables as well as slowing down payment of costs incurred. State the advantages and disadvantages of your ideas.
A company's cash balance, material inventory, work in progress, and accounts receivable totals $500,000. The cash cycle is 100 days. How much sales can the company perform if accounts payable and overbillings are not considered?
Why would the lender loan money to a contractor to buy construction equipment but not to fund work in progress?
Compare crisis borrowing with establishing a line of credit. Make sure to state the advantages and/or disadvantages of each.
Why do construction companies generally experience negative cash flow in months when profits are generated?
Draw the negative cash flow figure (cash trap) and explain all parts.
One of the authors was the general manager and junior owner of a concrete construction company. Later, the author's wife owned and managed a deli-bakery. In your opinion, is the author (and his wife) crazy or not? Explain your opinion.
What is the number one reason for construction company failure?
Which industry has a higher failure rate?
Rank the construction industry among other industries concerning business failure rate.
Identify differences in accounts and offer reasons that the account is over or under budget.
Prepare a trend statement.
On the same spreadsheet perform the following tasks:a. Prepare the monthly budget for January 2019.b. Compare actual to budgeted data for January 2019 by applying the horizontal and vertical techniques.
Some construction companies track profit to control profit. What is wrong with this practice?
Direct cost relationships should be established from which cost control document? Why?
What is a trend statement?
A company buys formwork in the amount of $50,000 to be used on projects for the next three years.The purchase is made in the third month ofthe budget period. Is the $50,000 purchase included as a cost for the month? If not, how should the cost be recognized?
Which technique is applied when comparing actual to budgeted fixed company costs?
Which analysis technique is applied when comparing actual to budgeted variable overhead costs?
A company generated the following percentage of total earnings for January for the last five years: Year 1 = 3%; Year 2 = 4%; Year 3 = 7%; Year 4 = 3%; Year 5 = 2%.What percentage of earnings could be expected for the coming year if Year 3 represented an unusually mild January? Explain your answer.
Explain the two methods for portioning the annual earnings to each month, and when each method should be used.
Why must monthly budgets be established to control company costs?
Does comparing the actual year-end statement to the budgeted year-end statement serve any purpose? If so, what is that purpose?
Related to time duration, what is the difference between project cost control and company cost control?
What are the three key functions a company must adequately perform to achieve financial success?
Company costs make up a very small portion of the total cost to own and operate a construction company. Why is it important that these costs be controlled?
Why can't project costs be controlled using the budgeted income statement?
Which types of cost must be controlled to generate company profit?
Given the nature of the industrial remodel work and American's distaste for the work, comment on the minimum markup generated by the profit center. Should either of the markup rates be adjusted? Why?
The company does time and material work for an industrial remodel project. Total direct labor cost for the project is $60,000. What amount should be billed to the client for the company to receive the minimum overhead recovery and required profit?
The company prices a commercial remodel project. Direct costs shown on the bid summary sheet are as follows: direct labor = $150,000; direct material = $50,000. Complete the cost estimate by allocating overhead and profit to the project. (Apply the choice made in problem #2 above.)
The company prices a commercial new work project. Direct costs shown on the bid summary sheet are as follows: direct labor = $300,000; direct material = $400,000; subcontracts = $200,000; job overhead = $20,000. Complete the cost estimate by allocating overhead and profit to the project. (Apply the
Supposing the contractor wanted to use subcontracts as the allocation base, develop the allocation rates for overhead and profitforthe company budget.
Calculate the overhead rate only by applying the following rates to the company budget-total direct cost, direct labor cost, direct labor hours (assume the average labor cost is $30 per hour), direct material cost, and dual recovery.
Calculate the overhead and profit rate by applying the gross profit technique to the coтpany budget.
Calculate the overhead and profit allocation rates for each method selected in problem #2 above.
Select the appropriate allocation method for each profit center.Why was each method selected?
Comment on American's current practice for allocating company overhead and profit to cost estimates. List at least three key problems with this markup policy.
What is the outcome when allocating overhead and profit to labor-intensive projects when the direct labor cost method is used? To material-intensive projects?
What is the outcome when allocating overhead and profit to labor-intensive projects when the total direct cost method is used? To material-intensive projects?
Why is the selection of the appropriate overhead and profit technique critical to the construction industry compared to other industries such as manufacturing, wholesale sales, and retail sales?
What advantage does the total direct cost technique have over the gross profit technique when marking up for overhead and profit?
The direct labor cost method and the direct labor hours method both mark up the labor resource used to complete a construction project. Explain the difference between them and when one would be applied in lieu of the other.
A commercial plumbing contractor is engaged in over-the-counter sales of plumbing material and fixtures as well as the new installation and repair of plumbing systems.Which three profit centers should be defined? What allocation techniques should be applied to each profit center? Why?
A framing company enters into contracts where the residential home builder provides all material and lifting equipment to frame the house while the framing company provides the labor.Which allocation methods could be used to accurately allocate overhead to cost estimates?
What is the weakness of one rate, one base allocation techniques such as total direct cost as compared to two rates, one base allocation techniques such as dual recovery?
Compare the following overhead allocation techniques: total direct cost, direct labor cost, and dual recovery. Explain the direct cost items marked up for each and when each would give an accurate allocation of overhead. State the type of contractor that would most appropriately apply each method
Which "costs" must be allocated to the cost estimate?
Is allocating company overhead to individual cost estimates an insignificant activity?provide reasons for your response.
What is wrong with developing one overhead and profit markup rate for all projects?
What is wrong with using standard markup rates for overhead and profit that are found in estimating manuals and texts?
What is the 10 + 10 rule and why is applying this rule to construction cost estimates a problem?
Two types of costs are identified when preparing the cost estimate: those that are direct takeoff costs and those that are allocated. Give examples of each type of cost. Which cost is apparently more accurately forecast by the average construction company? Why?(Consider input data when answering
Assuming the company can accomplish the changes in problem #11, comment on whether you think it is a good idea. Which change is the riskiest and why?
The company decides to increase price by 1%, decrease the variable cost ratio by 2%, and cut $8,000 from the fixed cost portion of the budget. What earnings are required to generate the profit goal? What is the percentage change in work quantity?
The company has relied on word-of-mouth advertisement in the past. One idea is to advertise by conventional means during the budget period to generate more work. Annual cost for the advertisement is $40,000. Assuming the company can increase its bonding capacity to $9,000,000, what earnings are
The company decides to implement some measures to increase labor productivity and decrease labor cost.By what percentage must labor cost decrease to generate the profit goal?
What change in the variable cost to earnings ratio is required to earn the profit goal?
If the company decreases the variable cost to earnings ratio by 1%, what earnings are required to yield the profit goal? What is the change in work quantity?
If the company increases price by 5%,what earnings are required to yield the profit goal?What is the change in work quantity?
Ifthe company decreases price by 5%, what earnings are required to yield the profit goal?What is the percentage change in work quantity?
How much must profit increase to reach the company goal?
What is the attainable ROI?
What is the attainable profit?
Prepare an attainable budget based on the bonding capacity limit.
Why is decreasing price to get more work to make more money not a valid philosophy for the construction industry?
What employees other than the estimator affect the ultimate price of the project?Explain how these employees affect the price.
Define price competition. Why is it a concern to the construction company?
Define price sensitivity. Why is it a concern to the construction company?
Explain the process for applying cost-volume-profit analysis to gauge the impact of a decision. Include the four steps in your explanation.
What is the advantage of applying the cost-volume-profit technique to analyze a decision's profit-producing potential?
Explain the common approach that many construction companies apply when determining whether a change to company operations will generate more profit. What is wrong with this method?
Of the four variables in question #1, which stands the greatest chance of successfully increasing profits? Which is the easiest to implement?
List the four variables contained in the income statement that affect company profits.Explain how these variables affect profits.
Assuming the company budget is attainable, prepare a budget for each profit center.For input information, see the results ofthe profit center analysis for American in the Case Study in Chapter 4.
Analyze the budget for attainability. Given the case data,is the budget attainable? Justify your answer.
Complete the 2019 budget and check for mathematical accuracy.
Calculate the earnings required (revenue) to generate the profit goal (problem #4) given the changes to the cost structure found in problem #5.
Forecast the cost structure for the budget period ending 2019. Use the actual income statement for the period ending 2018 with the case data above to forecast fixed cost in dollars and variable cost as a percentage ofrevenue. List the beginning cost or ratio for each account, the adjustment to the
Assuming the ROI method is used to set the profit goal, calculate the after-tax goal for the budget period ending 2019.Then,express the after-tax goal in before-tax terms using the 2018 tax rate found in Table 3.11 in Chapter 3.Find the beginning net worth amount on the balance sheet for the period
Calculate the minimum ROI expected by the owners of American.
Should the profit goal be a before-tax goal or an after-tax goal? Why?
Which method should be used to establish the profit goal?
List the critical uses of the company budget.
What are the key variables when determining that the budget is attainable?
There are two forms of the cost-volume-profit formula. List both and explain when each is used.
Define the terms risk-free rate and risk premium and explain their use.
Find the return on investment (ROI) ratio for the same time period.
Find the median, lower-quartile, and upper-quartile profit to revenue ratio for an electrical contractor performing $10 million in sales for the latest period ending March 31 by applying data found in the RMA annual statement studies. These studies can be accessed via the internet and or through
An entrepreneur owns and operates a construction company as a sole proprietor. What should be the company profit goal iffamily "needs" require $40,000 before tax, and the family "wants"add another $40,000, if the owner receives $3,000 per month in salary?
List the three methods for determining the company profit goal. When should each be applied?
List and explain the six factors to be consideredwhen preparing the company budget.
What purpose does breaking the company budget into profit center budgets serve?
When the company budget is broken into time periods, what is it called? What purpose does it serve?
What are other names for the company budget?

Showing 1 - 100 of 4135

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last

Practical Construction Accounting And Financial Management 1st Edition Yunfeng Chen, Frederick Barnes Muehlhausen - Solutions

Step by Step Answers