Dwelling cost new is $296,000. A separate 528 sf garage costs $52/sf; additional site improvements cost $14,500. No components overlap and land is excluded. What total improvement cost new results?
Correct Answer
C) $337,956
296000+528×52+14500 = 337956. Common errors: leaving out the site improvements gives $323,456; reporting only the dwelling cost gives $296,000; counting the garage cost twice gives $365,412.
Why This Is the Correct Answer
Option C is correct because the garage costs 528 × $52 = $27,456. Adding the $296,000 dwelling and $14,500 site improvements gives $296,000 + $27,456 + $14,500 = $337,956.
Why the Other Options Are Wrong
Option A: $296,000
Option A, $296,000, is the dwelling cost alone and leaves out both the $27,456 garage and the $14,500 site improvements. Adding them gives $296,000 + $27,456 + $14,500 = $337,956.
Option B: $323,456
Option B, $323,456, leaves out the site improvements ($296,000 + $27,456). Adding the $14,500 gives $337,956.
Option D: $365,412
Option D, $365,412, counts the garage twice ($296,000 + 2 × $27,456 + $14,500). The garage is counted once, giving $337,956.
House, garage, site work
Price each part once and add them: house, garage, then site improvements.
How to use: Use this checklist to confirm each component appears exactly once in a total.
Exam Tip
Compute any area-times-rate item first, then add. Check that no component is missing or counted twice.
Common Mistakes to Avoid
- -Leaving out site improvements
- -Omitting a separately priced garage
- -Including land value in improvement cost
Concept Deep Dive
Analysis
This question tests adding separately estimated improvement components. The garage cost is its area times its unit rate, and the site improvements are a separate lump sum. Add dwelling, garage and site improvements, with no land.
Background Knowledge
Total improvement cost new includes the main dwelling plus other improvements such as garages and site improvements like driveways and landscaping. Components priced separately must be added without overlap. Land is not part of improvement cost.
Real-World Application
An appraiser uses a cost service rate for the house, a separate per-square-foot rate for the detached garage, and a lump sum for the driveway and fencing. Adding them gives total improvement cost new before depreciation.
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