Here is a question from the practice exam:
Refer to the exhibit.
An architect is reviewing a contractor's application for payment and notes that retainage amounts are missing from the G703 Continuation Sheet. The owner-contractor agreement stipulates the following variable retention rates:
- 10% retainage shall be withheld from each application for payment for all hard costs of construction, which is defined as the cost of materials and the labor and equipment necessary to install them.
- 5% retainage shall be withheld for all overhead and other soft costs.
What is the total amount of retainage that should be withheld from the application for payment?
I understand how to use the information from column E on the continuation sheet. What I am uncertain about is why the explanation of the correct answer says not to use any of the information in column F. The first bullet point clearly states to include the cost of materials, and the A201 clearly states that this includes materials stored on site, or even off site if the owner agrees.
Column E only has $0 entered until the total which includes $5,100, which is confusing me. At first, I thought maybe the materials were bought in a previous month and are still being stored, thus their cost would have been included in column E (or F maybe?) of a previous continuation sheet, and thus the owner would have already payed for it. But this seems to be the first application for payment, column D, "from previous application," if filled entirely with $0. If there is no previous payment, then the stored materials should be bought by the owner under this application for payment, at least that was my assumption.
My question essentially is why we don't include column F, materials presently stored but not part of D or E, when calculating retainage? Also, why are 6 rows of $0 resulting in a total of $5,100?
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