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What amount should granite construction bid for the project

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Reference no: EM132593754

Granite Construction Incorporated is a major construction firm whose projects include roads, highways, bridges, dams, tunnels, mass transit facilities, and airports. Suppose Granite Construction wants to bid on a project to construct a bridge in Nevada. Estimators have projected the expected direct materials costs to be $55 million and the direct labor costs (including design and construction) to be $30 million. The company uses a predetermined overhead allocation rate of 50% of direct labor costs and a markup of 20% of total costs.

Question 1: What items would most likely be included in direct materials?

Question 2: Calculate the estimated direct costs, the indirect costs, and the total costs for the project.

Question 3: What amount should Granite Construction bid for the project?

Question 4: Why does Granite Construction include both direct and indirect costs when calculating the markup?

Reference no: EM132593754

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