Question

Nebraska Concrete has secured a contract to build a frontage road for the Wayne, Nebraska. Dave is the Project Manager for Nebraska Concrete and has estimated that the cost of the project is $50,000. Nebraska Concrete’s policy dictates that he adds 18% onto the cost estimate. The company also estimates it can complete the project within two months. In the first month, the company incurred $20,000 in costs and completed 40% of the project. In the second month, the company incurred another $20,000 in costs and completed the remaining 60% of the project. The total cost incurred was $40,000.

1. Provide a sentence that might describe Nebraska Concrete’s effectiveness regarding the project.

2. Provide a sentence that might describe Nebraska Concrete’s efficiency regarding the above project.

3. What are the gross sales for the project?

4. What are the actual expenses for the project?

5. What was the net income for the project?

Answer 1

Nebraska Concrete was both effective and efficient in completing the frontage road project on time and under budget. The project's gross sales were $59,000, actual expenses were $40,000, and the net income was $19,000.

Step-by-step explanation:

To assess Nebraska Concrete's effectiveness regarding the project, we can say that the company was effective as it completed the project on time by finishing the construction of the road in the two-month time frame given. Regarding the efficiency of Nebraska Concrete, they were highly efficient as they completed the project under budget, incurring $10,000 less in costs than estimated.

The gross sales for the project can be calculated by adding the 18% markup to the estimated cost of the project. The estimated cost was $50,000; adding 18% ($9,000) gives us gross sales of $59,000.

Actual expenses for the project amounted to a total of $40,000 since that was what the company incurred over the two months it took to complete the project.

To calculate the net income, we take the gross sales ($59,000) and subtract the actual expenses ($40,000) which gives us a net income of $19,000.