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maevemboucher78
04.06.2021 •
Business
OMG estimates tender costs by identifying all costs that are likely to be directly associated with
the project. To obtain the final tender bid, the total professional (engineering and scientist)
labour costs are marked up by 80 per cent, and all other costs are marked up by 50 per cent.
These margins are intended to cover any indirect costs plus provide the required profit margin
on the project.
The following direct costs has been estimated for the highway project:
Input Costs
Civil engineers 150 hours $25 000
Environmental scientists 100 hours 15 000
Support labour 120 hours 10 000
Travel 1 000 km 1 000
Computer time 80 hours 2 500
Photocopying, phone, fax 500
Required:
1. Estimate the tender bid for the project. (5 marks)
2. Estimate the profit on the project if the bid is successful and all costs are incurred as
planned. (5 marks)
3. Once a project has begun, OMG will use a costing system that tracks all direct costs to
projects.
If the highway bid is successful, how would managers at OMG use this information? (5
marks)
Solved
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Ответ:
OMG
1. The estimated tender bid for the project is $96,000.
2. The estimated profit on the project is $42,000.
3. Managers at OMG use this information to compare the actual costs incurred with the estimated costs. This enables them to determine if they can still achieve the same level of estimated profit, control the project's costs, and to benchmark future projects.
Explanation:
a) Data and Calculations:
Markup of total professional (engineering and scientist) labor costs = 80%
Markup of other costs = 50%
Estimated direct costs:
Input Costs Civil engineers 150 hours $25 000
Environmental scientists 100 hours 15 000
Support labour 120 hours 10 000
Total direct labor costs $50,000
80% markup 40,000
Total direct costs $90,000
Other costs:
Travel 1 000 km $1 000
Computer time 80 hours 2 500
Photocopying, phone, fax 500
Total other costs $4,000
50% markup 2,000 $6,000
Total bid costs $96,000
Estimated project profit:
80% markup on direct labor costs 40,000
50% markup on other costs 2,000
Total estimated project profit $42,000
Ответ: