A general contractor receives a change order request that will add $45,000 to the contract price and extend the schedule by 12 days. The original contract was for $850,000 with a 180-day duration. What percentage increase does this represent to the original contract value?
Correct Answer
B) 5.29%
The percentage increase is calculated as ($45,000 ÷ $850,000) × 100 = 5.29%. This represents the proportional increase in contract value due to the change order.
Why This Is the Correct Answer
Option A is correct because percentage increase is calculated by dividing the change amount by the original amount and multiplying by 100. The formula is: (Change Amount ÷ Original Amount) × 100 = Percentage Increase. In this case: ($45,000 ÷ $850,000) × 100 = 0.0529 × 100 = 5.29%. This is a fundamental percentage calculation that contractors must understand for change order analysis.
Why the Other Options Are Wrong
Option C: 4.85%
This answer (6.67%) is significantly higher than the correct calculation and likely results from mathematical error or possibly using an incorrect base amount in the calculation.
Option D: 5.88%
This answer (4.85%) is incorrect because it appears to be the result of an error in the division calculation or possibly confusing the numerator and denominator in the percentage formula.
Memory Technique
Remember 'CEO' - Change over Original equals percentage. The change order goes on top, original contract on bottom, then multiply by 100 for percentage.
Reference Hint
Look up contract administration and change order procedures in your Florida Building Code or construction management reference materials, typically found in project management chapters.
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