Financial Plan

Submitted By NinaYahia
Words 1000
Pages 4
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=\$50,000
2. Material required for electrical hook-up is 400 feet at \$ 25 per foot=\$10,000
3. Controls for each piece of equipment are estimated at \$ 600 each=\$600x2=\$1,200
4. Required start-up material is 3,700 pounds at \$ 2.70 per pound =\$9,990
5. Company labor for installation requires two maintenance specialists for two days at eight hours per day and \$ 35 per hour=\$1,120
6. Contract labor is estimated at a fixed price of \$ 7,500=\$7,500
7. Engineering is estimated to be 15% of (equipment / material) cost based on past experience=\$10,678.50
8. Inspection is estimated to be 3% of (labor) cost based on past experience=\$258.60
9. General and Administrative expenses are estimated to be 5% of the total of (equipment / material) and (labor) based on past experience.=\$3,990.50
Equipment/material=\$71,190.00
Installation/Labor=\$8,620.00