You are to prepare a cost estimate for producing 1000assemblies. Each assembly consists of a cylindrical tube, twoidentical end covers, and a purchased bracket. The brackets cost$8.25 each. Each tube costs $180 for the casting and requires 2.5standard hours of machining. It requires 12 hours to set up themachining operations and a setup is good for the machining of 500castings. The end covers are produced on a punch press thatrequires 1.2 hours per cover of run time and 4.0 hours for presssetup. Press setup is good for producing 400 pieces. Material costsper cover is $.50. The direct labor rate is $16.00 per hour.Manufacturing overhead is 150 percent of direct manufacturinglabor. Material overhead is 3 percent of the total material andsubcontract amount. General and administrative costs are 15 percentof labor and material with appropriate overhead.
What is the calculated unit cost through general andadministrative costs? Show your calculations
You are to prepare a bid for producing 100 brackets. Thebrackets are made on a punch press and screen printed with a partnumber. All screen printing is done at one time, but the bracketsare made in batches of 40. Punch press set up time is 2 hours persetup and .05 hour per print. Screen printing required is 6 minutesper bracket. Assume no attrition or learning curve on eitherprocess. Material cost is $.50 per piece. Direct labor rate is$15.00 and overhead is 200 percent of direct labor. G&A is 30percent of total material, labor, and overhead costs. A 10 percentprofit is expected.
What is your total bid price for the 100 brackets? Show yourcalculations.
The John Day Company proposed a general andadministrative (G&A) rate of 16.8 percent of totalmanufacturing costs on a 20x8 proposal. The contractor provided thefollowing data upon the request of the contract negotiator whodesired to analyze the rate.
- Does the proposed 20x8 G&A rate appear to bereasonable for the estimated total manufacturing group? Includeyour rationale.
- If not, based on historical information above, whatG&A rate appears reasonable? Explain.
