A contractor is evaluating two projects for next year. Proje…

A contractor is evaluating two projects for next year. Project A is expected to have revenue of $10 million and direct costs of $8.5 million. Project B is expected to have revenue of $8 million and direct costs of $6.2 million. Overhead allocation for either project would be $1 million. From a gross margin perspective (ignoring overhead), which project is more attractive, and why?

A project was budgeted to generate revenue of $15 million wi…

A project was budgeted to generate revenue of $15 million with a total cost of $13.5 million. At year-end, based on percentage-of-completion, 60% of the project is complete. Actual cost incurred to date is $8.7 million. What is the cost variance to date compared to the budgeted cost for 60% completion?

A contractor’s budget for a project planned labor cost of $2…

A contractor’s budget for a project planned labor cost of $2.0 million for 40,000 labor hours. At the halfway point, 22,000 hours have been worked at a cost of $1.2 million. What is the labor cost variance at this point (actual cost vs. budgeted cost for actual hours) and how should it be interpreted?