What is the original contract price

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Question - On July 1, 2014, OG obtained a contract to construct a building. The building was estimated to be built at a total cost of P 15,000,000 and is scheduled for completion on October 2016. The contract contains a penalty clause to the effect the other party was to deduct P 35,000 form the contract price for each week of delay. On the other hand, if the contractor was able finish the building earlier than agreed, it will be rewarded an amount equal to P 50,000 for every month of early completion. Furthermore, cost escalation clause was included in the contract. In 2015, the estimated costs of particular construction material amounting to P 520,000 were bought for P 780,000. The increase in the contract price related to this cost escalation was approved by the client. Completion was delayed for 4 weeks. The records show:

 

2014

2015

2016

Costs incurred

P1,750,000

P6,440,000

P1,085,000

Estimated cost to complete

7,000,000

1,810,000

-

Progress billings

1,400,000

15,225,000

4,200,000

Required - What is the original contract price in 2014?

Reference no: EM132699093

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