Problem 3: Project Cost Bid Estimate (15 points) Thomas Construction Company pre

Question

Problem 3: Project Cost Bid Estimate (15 points) Thomas Construction Company prepares a bid for a project. Table 3-1 shows estimates for the staff and monthly gross pay attributed to a specific project, and table 3-2 shows total estimates for material, supply, travel and subcontract costs. The fringe benefits are 42% for each staff member, and the indirect cost rate is 30% Determine the direct costs, fringe benefit costs, indirect cost, and the total bid price for the company Table 3-1: Labor Cost Categories Labor cost category ly gross S9,000 $7,000 $6,000 $5,800 $5,500 $2,000 $2,200 $2,350 $3,000 $2,300 $2,900 $1,800 on Engineer 1 ngineer 2 ngineer 3 oofer istrative staff Table 3-2: Material, Supply, Travel and Subcontract Costs ost cate ost $450.000 35,000 $20,000 $50,000 tract

Explanation / Answer

Direct cost are the cost which are directly associated with the project such as labour, software, equipments and minerals. so the direct cost would be the sum of all the quantities assciated with the project multiplied by the duration they are involved. i.e., for project manager 9,000 * 8= 72000

so total direct cost would be (9000*8)+(7000*8)+(6000*6)+(5800*5)+(5500*6)+(2000*8)+(2200*4)+(2350*2)+(3000*8)+(2300*6)+(2900*4)+(1800*8)+45000=364300

Fringe benefits are the costs paid for the benefit of the employees. here in question it is given as 42%

so fringe beneft cost=.42 ((9000*8)+(7000*8)+(6000*6)+(5800*5)+(5500*6)+(2000*8)+(2200*4)+(2350*2)+(3000*8)+(2300*6)+(2900*4)+(1800*8)) = 153006

Indirect costs are the costs which are not directly associated with the projects such as cleaning, transport, supply, fringe benefits etc

here indirect cost=supplies+travel+fringe benefits * indirect cost rate =(35000+20000+153006)*1.3=270407.8

total bid price = sum of all cost (direct+indirect +other costs)= 364300+270407.8+ 50000= 68407.8

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.