Question

What is the total project overhead for a project that last for months and has the following cost? Labor is $5000 materials or $10,000, equipment rentals or $2000, superintendent's annual salary is $40,000, office rent is $500 per month; in office utilities or $400 per month.

Answer 1

To calculate the total project overhead, we must add the monthly costs of the superintendent's salary divide by 12, office rent, and utilities; labor, materials, and equipment rentals are not overhead. Without the exact project duration, we can't calculate a total figure but the formula for total project overhead is provided.

Step-by-step explanation:

To calculate the total project overhead costs, we need to consider all relevant expenses that are not directly tied to the physical construction but are necessary to support the project. The overhead costs provided include labor, materials, equipment rentals, superintendent's annual salary, office rent, and office utilities. Since the project lasts for months and the superintendent's salary is given annually, we will calculate the monthly cost for the superintendent. The costs will be added up to determine the total project overhead.

Step-by-Step Overhead Cost Calculation:

1. Monthly Superintendent's Salary = $40,000 / 12 months = $3,333.33
2. Office Rent per month = $500
3. Office Utilities per month = $400
4. Total Monthly Overhead = Monthly Superintendent's Salary + Office Rent + Office Utilities
5. Total Monthly Overhead = $3,333.33 + $500 + $400 = $4,233.33
6. Total Project Overhead for "x" months = Total Monthly Overhead x "x" (number of months the project lasts)

Note that the labor, materials, and equipment rental costs provided earlier are direct costs and should not be included in the overhead costs. The exact total project overhead cannot be calculated without the precise duration of the project in months. However, the student can plug in the project duration to obtain the total overhead cost using the formula provided in step 6.