Week 2 Assignment

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Week 2 Assignment

By | July 2012
Page 1 of 5
Jonas
PM592~ Week 2 Assignment
7/21/12

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 5. Company labor for installation requires two maintenance specialists for two days at eight hours per day and $ 35 per hour

6. Contract labor is estimated at a fixed price of $ 7,500
7. Engineering is estimated to be 15% of (equipment / material) cost based on past experience 8. Inspection is estimated to be 3% of (labor) cost based on past experience 9. General and Administrative expenses are estimated to be 5% of the total of (equipment / material) and (labor) based on past experience.

Note: For this problem, only items 5 and 6 are considered "labor" for the purpose of calculating items 8

2-1 Basic Estimating |
Equipment/Material| Quantity | Rate | Cost | Total | Equipment #1| 1| $ 15,000.00 | $ 15,000.00 | $ 15,000.00 | Equipment #2| 1| $ 35,000.00 | $ 35,000.00 | $ 35,000.00 | | | | | $ 50,000.00 |

Electrical hook up (per feet)| 400| $ 25.00 | $ 10,000.00 | $ 10,000.00 | Controls per Piece| 2| $ 600.00 | $ 1,200.00 | $ 1,200.00 | Start-up Material | 3700| $ 2.70 | $ 9,990.00 | $ 9,990.00 | | | |  | $ 21,190.00 |

| | | Total | $ 71,190.00 |
| | | | |
Maintenance/Contractor| Hour| Rate | Cost | Total | Maintenance...