ENGR 100 Lecture Notes - Lecture 29: Work Breakdown Structure, Indirect Costs, Fixed Cost
Document Summary
Estimates are then split up by next lower level. Process continues until all work is estimated. Cannot be directly related to a unit. E. g. senior managers, general office staff, maintenance and cleaners etc. Based on collecting judgments and experience of subject matter experts and middle. Resource requirements estimated by those responsible for executing tasks. Required resources then converted to costs and aggregated to different levels of the. Fixed costs: costs occurred in a predetermined amount independent of how many. Fixing the selling price can be based upon a value basis or a cost plus basis with either. Value basis is used to set selling prices according to the amount the customer will pay. The maximum price is dependent upon the value and target customer places on that. Purchase of specialsed equipment used to manufacture product. Costs incurred in direct proportion to the number of units produced.
