Since the Architect Can Be Involved in Various Stages of the Development

question 4

Multiple Choice

Since the architect can be involved in various stages of the development process, there are a number of methods used to compensate him for his services, each of which may depend on the particular phase of development. If the architect provides pre-design services or schematics early in the development process, he will typically be compensated:

• A) on an hourly basis
• B) as a percentage of construction expenses
• C) by a fixed fee plus expenses
• D) only if he stays on the project through completion of the construction phase

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Definitions:

Variable Component

A part of a cost or expense that varies directly with the level of output or activity.

Fixed Component

A cost that remains unchanged in total regardless of changes in the level of activity or output over a certain period.

Overapplied

This refers to the condition in which the allocated costs in an accounting system exceed the actual costs incurred, often in the context of overhead or indirect costs in manufacturing.

Variable Component

Part of a cost or expense that changes in proportion with the level of activity or volume of output.