ARE Live: ARE Math

Review the following mock exam questions on ARE Math in preparation for the July ARE Live episode by 12:00PM Central Time on Thursday, July 14, 2022.

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* 1. The principal of a 6-person firm organized as an LLC is preparing their profit plan for the upcoming financial year. They are partially complete with the bottom section, after using estimates from previous years to fill out portions of the top and middle sections.

What should the firm’s net multiplier be for the upcoming financial year?

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Question 1 - Profit Plan excerpt

Question 1 - Profit Plan excerpt

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* 2. An architect is updating their cost of work estimate at the end of the DD phase, and is using the estimate prepared at the end of the SD phase as a starting point. The following changes were implemented during the DD phase of the project:

2,000 square feet of amenities were added

The client informed the architect that they have a 5% owner’s contingency included in their pro forma.

The client found a tenant for the retail space and added the scope of building out the space to the architect’s contract. The architect estimates that an additional $100/sf will be required to build out the space.

The apartment finishes were upgraded, and the architect expects a 5% premium to be added to the cost per square foot of the apartments.

The architect’s fee is based on a percentage of the construction cost, and is billed at 8%. What is the revised cost of work estimate at the end of design development? Round to the nearest dollar.

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Question 2 - Cost of Work Estimate

Question 2 - Cost of Work Estimate

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* 3. An architect is reviewing an application for payment when they notice a discrepancy in the figures. They decide to recreate the cover sheet in order to check the math. The contract for construction calls for a 10% contingency on both completed work and stored items. The previous application for payment amount was $298,725.

What is the current payment due? Round to the nearest dollar.

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Question 3 - Application for Payment

Question 3 - Application for Payment

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* 4. The partners at a firm are reviewing their current financial statements at the firm’s monthly finance meeting. The firm’s balance sheet lists $250,000 in current assets, $15,000 in work in progress that’s owed to the firm, $110,000 in total liabilities, and $140,000 in equity.

What is the firm’s current ratio? Round to the nearest tenth place.

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* 5. A principal is reviewing the work plan that was prepared by a project manager for a new construction healthcare facility. The architect is charging the client a fixed fee of $388,800.

The project phases will be billed at 20% SD, 25% DD, 30%CD, 5% BD, 20% CA

Principal - $200 direct hourly rate

Project Manager - $100 direct hourly rate

Designer - $60 direct hourly rate

During DD, the project will be staffed with 2 designers and 1 project manager, all working full time on the project.

The principal will spend 10 hours per week working on the project.

The firm has a 3.0 net multiplier

Based on the above information, how many weeks should the DD phase last? Round to the nearest whole week.

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* 6. During construction, the owner requests that the architect design a steel-framed canopy to enclose a patio with a new flat roof. The architect has specified three W10x22 beams that are 18 feet long each to frame the roof. The contractor included a unit price in the contract for construction of $50,000 per ton of steel framing to furnish and install. The contractor’s schedule of values also lists that the contractor’s overhead and profit (OH&P) markup on change orders is 14%.

What is the cost of the change order for the newly added steel beams? Round to the nearest dollar.