# Cost Estimation Assignment

January 30, 2017

Question
The project will need 3 full time employees: 1 senior research scientist and 2 associate scientists.

Previous projects had designated different salaries depending on the experience of each scientist.

Yearly salary range for Associate Scientists:

Entry level \$40,000/year, middle level \$50,000/year, and experienced level \$60,000/year.

Yearly salary range for Senior Researchers:

Entry level \$70,000/year, middle level \$80,000/year and more senior level \$90,000/year.

In addition to these salaries the company offers the following fringe benefits, which need to be included in the calculation:

10 days of vacation per year (52 weeks)

5 days sick pay per year

Medical insurance 25%

Retirement benefits 6%

Life insurance 3.16%

Space Needs

Scientists conduct most of their experimental work at a bench. Bench space is measured in linear feet. Usually 4ft to 8ft of linear bench space is allocated per Associate Scientist.

You allocate two 8ft benches to the project, at \$2000/bench/month.

The role of the Senior Scientist is to design the experiments and supervise the Associate Scientists in conducting the experiments.

Utilities

Consider 25% of the total rent cost for utilities.

Equipment and Material Needs

The equipment costs are calculated on per month rental basis and are already included in the bench costs.

The average material cost per experiment including all the supplies and reagents is \$400.

You are planning two experiments a day, during four days a week. The fifth day of the week you are planning to allocate time for the researchers to gather information, analyze the results and meet to give a weekly report of the project status. You are allocating 25 weeks of experiments for the six-month project.

These costs include payroll, accounting, HR, and legal.

Estimate a 5.01% of direct labor, direct cost, plus fringe, plus overhead.

Assignment: Estimate the total cost of the project, calculating values

With the information gathered.

Produce a cost estimate for this project.
Specify direct, indirect, fixed, and variable costs.
Use the techniques for cost estimation when applicable.
Analyze results.
Each Associate Scientist also is allocated one cubicle of office space at \$500/month.

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