The betterbilt construction company designs and builds, Finance Basics

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The betterbilt construction company designs and builds

Question: The Betterbilt Construction Company designs and builds residential mobile homes. The company is ready to construct, in sequence, 16 new homes of 2, 400 square feet each. The successful bid for the construction materials in the first home is $64, 800, or $27 per square foot. The purchasing manager believes that several actions can be taken to reduce material costs by 8% each time the number of homes constructed doubles. Based on this information,

a. What is the estimated cumulative average material cost per square foot for the first five homes?

b. What is the estimated material cost per square foot for the last (16th) home?

a. $24.12

b. $19.34

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