A contractor receives a stop work order from OSHA for fall protection violations. The project has $180,000 remaining work. Estimated daily costs are $3,200 for labor, $1,800 for equipment, and $800 for overhead. If corrections take 4 days, what is the total cost impact?
Correct Answer
D) $23,200
Daily cost impact is $3,200 + $1,800 + $800 = $5,800. Over 4 days: $5,800 × 4 = $23,200. Stop work orders create significant financial impact through continued costs without production.
Why This Is the Correct Answer
The correct answer is B ($23,200) because when OSHA issues a stop work order, the contractor must continue paying daily operational costs even though no productive work can be performed. The daily cost impact includes all ongoing expenses: labor ($3,200), equipment ($1,800), and overhead ($800), totaling $5,800 per day. Multiplying this daily cost by the 4-day correction period gives $23,200 in total cost impact.
Why the Other Options Are Wrong
Option A: $27,600
Option C ($27,600) is incorrect because it overestimates the daily costs, possibly by including additional costs that aren't specified in the problem or miscalculating the daily total.
Option C: $31,200
Option A ($19,200) is incorrect because it appears to exclude one of the cost categories, possibly overhead costs, resulting in an incomplete calculation of the true daily cost impact.
Memory Technique
Think 'SWO = Still Writing Out checks' - Stop Work Orders mean you're still paying costs but getting no progress
Reference Hint
OSHA regulations and construction safety standards chapter, or project cost management and change order sections
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