The streets and roads maintained by the government have not had an adequate maintenance program. The continuing failure to adequately and promptly repair tailures in the asphalt paving of local, collector, and arterial roadways has caused the government to incur excessive repaving/reconstruction costs for its roadways due to the early failure of their asphalt surfacing and subsequent deterioration of the roadway's base. The Public Works Department's Civil Engineers have recommended the establishment of a dedicated team for the rapid and efficient accomplishment of the repair of potholes and other paving Presently, the annual budget for maintaining and refurbishing failing roadways is $750,000. This amount has historically (over the most recent 10 years) increased by an average 8% annually. The Public Works Engineers estimate that the proposed maintenance program will reduce that budgetary item's cost annually by the following proportions ProgramCost Year Reduction ures 2 10% 10% 10% The accomplishment of this recommendation is expected to require the services of a full-time, dedicated crew of four (4) field personnel: one (1) Crew Foreman and three (3) Maintenance Workers. The efforts of this group will be the constant execution of a job-order report from the Public Works Department's current Road Inventory computer software's Repair Report List. They will accomplish their scheduled work using an automated asphalt patching system for the repair of potholes in major roadways that will be purchased for this purpose. Purchase price estimated a $175,000. The purchase price includes training of three (3) individuals in the operation and maintenance of the equipment. The cost of the crew's year 1 annual salaries and benefits are expected to conform to the following schedule 4 6% The Public Works Engineers also estimate program operating costs for materials, equipment m aintenance, repairs, and fuel as follows Program RoadwayEquipment Year Materials Maintenance Fuel 500 100,000 110,000 115,000 120,000 125,000 125,000 120,000 120,000 110,000 100,000 10,000 10,000 10,000 10,000 10,000 12,000 12,000 12,000 14,000 14,000 Position 2 Individual Cost Total Cost $51,000 115,500 S166,500 500 525 525 525 525 550 550 550 Supervisor 1 (1 S51,000 S38,500 4 Maintenance Worker II (3 Total: Note that salary & benefit costs can be expected to increase approximately 2.5% per year

The streets and roads maintained by the government have not had an adequate maintenance program. The continuing failure to adequately and promptly repair tailures in the asphalt paving of local, collector, and arterial roadways has caused the government to incur excessive repaving/reconstruction costs for its roadways due to the early failure of their asphalt surfacing and subsequent deterioration of the roadway's base. The Public Works Department's Civil Engineers have recommended the establishment of a dedicated team for the rapid and efficient accomplishment of the repair of potholes and other paving Presently, the annual budget for maintaining and refurbishing failing roadways is $750,000. This amount has historically (over the most recent 10 years) increased by an average 8% annually. The Public Works Engineers estimate that the proposed maintenance program will reduce that budgetary item's cost annually by the following proportions ProgramCost Year Reduction ures 2 10% 10% 10% The accomplishment of this recommendation is expected to require the services of a full-time, dedicated crew of four (4) field personnel: one (1) Crew Foreman and three (3) Maintenance Workers. The efforts of this group will be the constant execution of a job-order report from the Public Works Department's current Road Inventory computer software's Repair Report List. They will accomplish their scheduled work using an automated asphalt patching system for the repair of potholes in major roadways that will be purchased for this purpose. Purchase price estimated a $175,000. The purchase price includes training of three (3) individuals in the operation and maintenance of the equipment. The cost of the crew's year 1 annual salaries and benefits are expected to conform to the following schedule 4 6% The Public Works Engineers also estimate program operating costs for materials, equipment m aintenance, repairs, and fuel as follows Program RoadwayEquipment Year Materials Maintenance Fuel 500 100,000 110,000 115,000 120,000 125,000 125,000 120,000 120,000 110,000 100,000 10,000 10,000 10,000 10,000 10,000 12,000 12,000 12,000 14,000 14,000 Position 2 Individual Cost Total Cost $51,000 115,500 S166,500 500 525 525 525 525 550 550 550 Supervisor 1 (1 S51,000 S38,500 4 Maintenance Worker II (3 Total: Note that salary & benefit costs can be expected to increase approximately 2.5% per year

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity

Section: Chapter Questions

Problem 15CYBK

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