This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
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Here are the definitions:
Provisional Sum: A provisional sum is an amount included in a construction contract for work that has not yet been fully detailed or specified at the time the contract is signed. It represents an estimate for a particular item or section of work where the exact scope, quantity, or cost is unknown. The contractor is paid the actual cost of this work, plus their markup, once it is carried out and measured.
Prime Cost (PC) Sum: A prime cost sum is an amount included in a contract for the supply of specific materials or goods that have not yet been selected by the client or designer. It represents the cost of the materials themselves, excluding any labor, installation, or contractor's profit and attendance. The client then selects the actual items, and the contractor is reimbursed for the actual cost of those selected items.
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Provisional Sum: A provisional sum is an amount included in a construction contract for work that has not yet been fully detailed or specified at the time the contract is signed.
This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.