Construction cost survey-estimated cost per square foot rate

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Reference no: EM13855873

Over the years, National Association of Home Builders (NAHB) has periodically conducted “construction cost surveys” to collect information from builders on the various components that go into the price of a typical single-family home. In a recent NAHB’s construction cost survey (conducted in August and September of 2013), data shows that although lot sizes are shrinking, both the cost and size of the home are on the rise. The average home in the NAHB survey was built on 14,359 square feet (about a third of an acre) of land, had 2,607 square feet of finished floor area, and sold for $399,532.

Using the Chapter 5 - User Guide to the PMBOK 4th edition - Project Scope Management course material as a guide, the NAHB survey data, and the project WBS provided below with cost apportioned by different percentages, complete the homework questions with the assumptions that follow:

You are planning to build a 2,700 square foot house and the average price for a lot and house similar to the one you envision is consistent with the NAHB survey in ($) cost per finished square foot floor area. Fortunately, you and your friends are comfortable doing some of the work yourselves to save money.

The following average cost information is available from your lending bank that makes loans to local home builders and disperses progress payments to contractors when specific tasks are verified as complete.

24% Excavation and framing complete

8% Roof and fireplace complete

3% Wiring roughed in

6% Plumbing roughed in

5% Siding on

17% Windows, insulation, walks, plaster, and garage complete

9% Furnace installed

4% Plumbing fixtures installed

10% Exterior paint, light fixtures installed, finish hardware installed

6% Carpet and trim installed

4% Interior decorating

4% Floors laid and finished

1) What is the estimated cost per square foot rate for your new home based on the NAHB survey data?

2) Based on the cost per square foot of finished floor area that you calculated in a), what is the total estimated cost for your new home if you use contractors to complete all the tasks involved in building the house?

3) Estimate the total cost of the house if you and your friends complete the exterior painting, light fixture installation, finish hardware, and interior decorating on your own?

4) Why should the bank have combined (or why should the bank have not combined) Excavation and Framing in one large percentage (24%) category?

Reference no: EM13855873

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