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PROJ 6002 : Project Planning and Budgeting

   

Added on  2020-04-15

8 Pages1594 Words37 Views
Running head: cost & quality plans 1PROJECT COST AND QUALITY MANAGEMENT PLANS FOR POLY PRODUCTSINDUSTRYSubmitted byAffiliationSupervisor’s nameDate of submission

Running head: cost & quality plans 21.0. Project cost management planIt is a plan that represents policies, procedures, and documentation of how to estimate, budgetand control costs of a project[ CITATION Lar11 \l 1033 ]. Poly products industries cost planning andmanagement was based on proposal seeking bids to produce 10000 rubber components. Theplanning involved addressing cost risks, estimates, and budget for overheads used in productionprocess[ CITATION Phi13 \l 1033 ]. 1.1. Project cost planningProject planning is important in ensuring that resources are estimated and budgeted in effectiveand efficient manner[ CITATION Bry13 \l 1033 ]. Project costs estimates and budgets for polyproducts industries were based on market survey of the current prices with comparison of otherindustries. Bottom up estimating approach was used to estimate the work packages of the project.Poly products work was divided using work breakdown structure which was used for budgetingand estimation process. 1.2. Project cost risksThe several risks facing project cost management of poly products industries include: possibilityof union strike for salary increase of 1% per quarter and the current workforce increasing its rateof overtime to a value of 0.75%. In future the value of raw materials would increase making thecost of production to be higher. 1.3. Project estimates and costsThe following exhibits show summary of cost estimates, and budget for poly product industry. 1.3.1. Staff overhead estimatesThe estimates were based on the different units, hours worked, and grading structure for 800employees engaged. The proposal on the overhead was to increase and decrease at 10% for thosebelow and above grade 7 in the structure. Table 1 shows a summary of estimates for workers indifferent units as per the hour’s structure.

Running head: cost & quality plans 3Table 1 Unit staff overheadsStaff unit/sectionHourly rate Research and development1594Design1416Project engineering 1235Project management 730Cost accounting1010Contracts214Publications277Computers165Manufacturing engineering279Industrial engineering176Facilities680Quality control363Production line3270Traffic70Procurement 182Safety102Inventory control131Totals 11,8941.3.2. Cost estimation of materialsThe materials for production were based on the proposed schedule of delivery and the fixedvalue provided to the bidders. The raw materials were estimated on a cost value of $200 that wasfor a period of 12 months. Table 2 show a summary of cost of materials as per deliveries. Table 2 Cost of materials Delivery unitsCosts3000 units @$200600,0003000 units@$200700,0003500 units@$200700,000Totals2,000,0001.3.3. Overhead structure estimation

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