A state grant will reimburse a city for 40% of the architectural, construction and project management costs to build an annex to a city building. A city employee, who is paid salary and benefits of 510,000 a month, works half-time on the project for six months.
The city reports the following project budgeted and actual costs:
Purpose Budget Actual
Architectural fees $ 100.000 $ 90,000
Construction costs $10,500,000 $10,000,000
Based upon the above information, what is the amount of allowable costs that the state will reimburse the city on the grant?
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