PROJ522 assignment 1

PROJ522 assignment 1 - PROJ522 Cost, Pricing, Scheduling,...

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PROJ522 – Cost, Pricing, Scheduling, and Control Homework 1 -- Cost Estimation Suppose that you have been asked to price an 8-month external project. Direct labor is estimated at $100,000 per month, plus a 100% overhead rate. The total labor termination liability in any particular month includes, of course, the total amount (100%) of the current month’s labor expense (including overhead) plus (with the exception of the final month) a penalty of 80% of the following month’s labor expense (including overhead). So the total accumulated labor liability at any point during the project is equal to the accumulated labor expenses accrued up to the previous month, plus the current month’s labor termination liability. There are two material resources. Material A will cost $100,000, payable 30 days net. This material is needed at the end of the 5th month and has a 4-month lead time. The termination liability on Material A in any particular month is as follows: 1-30 days after ordering: 25% 31-60 days after ordering: 50% >60 days until the expense is paid in full: 100% after the expense has been paid in full, there is no
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PROJ522 assignment 1 - PROJ522 Cost, Pricing, Scheduling,...

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