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Cost ApproachMEDIUM13.6% of exam

A dwelling contains 2,400 square feet and costs $128 per square foot to build. An attached garage of 480 square feet costs $46 per square foot. What is the total cost new?

Correct Answer

C) $329,280

Why this is correct: each component carries its own rate, because a garage does not cost what finished living area costs. Calculation: (2,400 x $128) + (480 x $46) = $307,200 + $22,080 = $329,280. Why the other choices are wrong: $307,200 omits the garage; $368,640 applies the dwelling rate to all 2,880 square feet, which overprices the garage by more than twenty thousand dollars; $322,560 uses $32 per square foot for the garage rather than the $46 given.

Answer Options
A
$368,640
B
$307,200
C
$329,280
D
$322,560

Why This Is the Correct Answer

Why this is correct: each component carries its own rate, because a garage does not cost what finished living area costs. Calculation: (2,400 x $128) + (480 x $46) = $307,200 + $22,080 = $329,280. Why the other choices are wrong: $307,200 omits the garage; $368,640 applies the dwelling rate to all 2,880 square feet, which overprices the garage by more than twenty thousand dollars; $322,560 uses $32 per square foot for the garage rather than the $46 given.

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