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Question: Mrs. Tolstoy and her husband, Serve, are planning their dream house. The lot for the house sits h...

Mrs. Tolstoy and her husband, Serve, are planning their dream house. The lot for the house sits high on a hill with a beautiful view of the Appalachian Mountains. The plans show the size of the house to be 2,900 square feet. The average price for a lot and house similar to this one has been $120 per square foot. Fortunately, Serge is a retired plumber and feels he can save money by installing the plumbing himself. Mrs. Tolstoy feels she can take care of the interior decorating.

The following average cost information is available from a local bank that makes loans to local contractors and dispenses progress payments to cntractors 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

a. What is the estimated cost for the Tolstoys house if they use contractors to complete all of the house?

b. Estimate what the cost of the house would be if the Tolstoys use their talents to do some of the work themselves.

Please help with the problem as its giving me problems. Show how you got the answer so it wont become an issues for me in the future. Thank you for the help!

Solution

a). Estimated total cost for the house is ( 2900square feet* 120$ per ft).= $348000

b). If mr. And mrs. Tolstoy’s use their talent in plumbing and decorating the house:-

Plumbing roughed in= 6% of $348000           = $20880

Plumbing fixtures installed= 4% of $348000 = $13920

Interior decoration = 4% of $348000              = $13920

Total savings                                                     = $ 48720

So the cost would be if using their talent= $348000- $48720= $299280