Question

The budget for a construction project is allocated to land acquisition, building materials, and labor in the ratio 5: 3: 2. During the project, the cost of land acquisition rose by 5%, building materials rose by 10%, and labor fell by 20%. What is the percent change (increase or decrease) in the total project cost?

• A. 1.0% increase
• B. 1.5% decrease
• C. 1.5% increase
• D. 2.0% decrease

Answer 1

Answer:

C. 1.5% increase

Let the original total budget be divided in the ratio:

5 : 3 : 2

Total parts:

5+3+2=10

Assume total cost (=100).

Then:

• Land acquisition (=50)

• Building materials (=30)

• Labor (=20)

Apply the changes

• Land increases by (5%):

$50 \times 1.05 = 52.5$

• Materials increase by (10%):

$30 \times 1.10 = 33$

• Labor decreases by (20%):

$20 \times 0.80 = 16$

New total cost

$52.5 + 33 + 16 = 101.5$

Increase in total cost:

$101.5 - 100 = 1.5$

Percentage increase:

$\frac{1.5}{100} \times 100 = 1.5\%$

So, the total project cost shows a:

$\boxed{1.5\% \text{ increase}}$