It Is Going to Cost $120,000 a Day Simply to House

question 26

Multiple Choice

It is going to cost $120,000 a day simply to house and feed a construction crew in the farthest reaches of northern Alaska. This would be an example of a situation requiring reducing the project duration due to

• A) imposed project deadlines.
• B) time to market.
• C) unforeseen project delays.
• D) high overhead.
• E) incentive contracts.

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Definitions:

Factory Overhead

All indirect costs related to manufacturing, such as utilities, maintenance, and salaries of indirect labor, not directly tied to production.

Direct Materials

Materials that can be directly linked to the creation of a product and represent a large part of the cost of production.

Direct Labor

The labor cost of workers who are directly involved in the production of goods or the provision of services.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct labor and direct materials.