Question

Custom Homebuilders (CH) designs and constructs high-end homes on large lots owned by customers. CH has developed several formulas, which it uses to quote jobs. These include costs for materials, labor, and other costs. These estimates are also dependent on the region of the country a particular customer lives. The following are the cost estimates for one region in the Midwest. Administrative costs $ 20,000 Building costs – per square foot (basic) $ 90 Building costs – per square foot (moderate) $ 150 Building costs – per square foot (luxury) $ 225 Appliances (basic) $ 15,000 Appliances (moderate) $ 25,000 Appliances (luxury) $ 45,000 Utilities costs (if required) $ 40,000 Required: A customer has expressed interest in having CH build a moderate, 3,000 square-foot home on a vacant lot, which does not have utilities. Based on the engineering estimates above, what will such a house cost to build?

Answer 1

Answer:

$495,000

Explanation:

Based on the engineering estimates above cost to build such a house can be calculated by just adding the cost incurring in building the house as a moderate house.

The cost of a moderate 3000 square foot house

Administrative Cost            = 20,000

Building Cost (150x3000) = 450,000

Appliances                           = 25,000

Utilities Cost                        = NIL

Total Cost                            = 495,000