Pm 592 Week 2

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Instructions: Please complete all 3 multi-part problems for this week 's assignment.
2-1 Basic Estimating Problem
Your company is installing a new piece of machining equipment and a robotic arm. Your manager asks for the project costs by cost category as well as the total amount. Given the following information, develop a base cost estimate by grouping costs by Equipment / Material (items 1 – 4), Installation / Labor (items 5 and 6), and Overhead (items 7-9). 1. Two pieces of equipment costing $ 15,000 and $ 35,000 2. Material required for electrical hook-up is 400 feet at $ 25 per foot 3. Controls for each piece of equipment are estimated at $ 600 each 4. Required start-up material is 3,700 pounds at $ 2.70 per pound
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Listed below are the initial cost estimates for the ingredients and labor for 1000 sandwiches delivered to the retail outlets: PRODUCT COMPONENT | COSTESTIMATE | TYPE OF ESTIMATE | Buffalo | $80.00 | Order of Magnitude (market price) | Lettuce | $15.00 | Definitive (own farms) | Tomatoes | $12.00 | Definitive (own farms) | Pickles | $7.00 | Budget (existing supplier) | Corn Starch | $5.50 | Budget (existing supplier) | Mustard | $3.70 | Definitive (in stock item) | Buffalo special sauce | $3.00 | Order of Magnitude (new product) | Aromatic Herbs | $6.50 | Budget (existing supplier) | Semi toxic food preservative | $1.50 | Definitive (in stock item) | Labor | $6.00 | Order of Magnitude (Buffalo preparers an unknown quantity) | Packing and shipping | $18.00 | Definitive (same as current product) | Total cost | $158.20 | NA |

The target retail price for the new sandwich is $1.49 each. This is the cost the retailer thinks they can sell the sandwich and still make money. The average markup from Bill to the Retailer is 150%. New products are targeted for 100% markup by the Retailer to the consumer on introduction, so that price and cost reductions can be taken as
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