During the Plan Order Phase, the hours for the Receive Order phase (marked with an *)...
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During the Plan Order Phase, the hours for the Receive Order phase (marked with an *) are actual times, as this work has already been performed. In addition to these internal labors costs, the Production Supervisor has estimated that the European History eBook will incur these costs: • An overhead rate on all direct labor of 1.50. • Material costs of $1,000 for each permission needed • Equipment costs of $800 for unique equipment needed for this project (a special oversize map scanner) Subcontract labor of $500 for installation and training in the use of the oversize map scanner Computer support costs of $600 • Sales commission of 20% In addition to direct and indirect costs, Global Green Books targets a 25% profit margin on each project, and budgets for a 10% contingency on labor and 20% contingency on permissions. Comment on the following aspects of the case study: a) What are the types of direct costs identified in this case? Why are they viewed as direct costs? b) What are two forms of costs identified? c) What are some problems that might arise that could impact the budget? d) Why would Global Green Books set aside contingencies? How would needed rework, if caught in the quality reviews, be accounted for in the budget? e) What are the main cost drivers of this project? f) What other information, if any, would you like to see included in the budget for this project? Why? Create a budget for the European History eBook project. a) What are the costs by major phases of work for making this European History eBook? b) What are the total costs for direct labor? c) What is the total estimated cost of this European History eBook? During the Plan Order Phase, the hours for the Receive Order phase (marked with an *) are actual times, as this work has already been performed. In addition to these internal labors costs, the Production Supervisor has estimated that the European History eBook will incur these costs: • An overhead rate on all direct labor of 1.50. • Material costs of $1,000 for each permission needed • Equipment costs of $800 for unique equipment needed for this project (a special oversize map scanner) Subcontract labor of $500 for installation and training in the use of the oversize map scanner Computer support costs of $600 • Sales commission of 20% In addition to direct and indirect costs, Global Green Books targets a 25% profit margin on each project, and budgets for a 10% contingency on labor and 20% contingency on permissions. Comment on the following aspects of the case study: a) What are the types of direct costs identified in this case? Why are they viewed as direct costs? b) What are two forms of costs identified? c) What are some problems that might arise that could impact the budget? d) Why would Global Green Books set aside contingencies? How would needed rework, if caught in the quality reviews, be accounted for in the budget? e) What are the main cost drivers of this project? f) What other information, if any, would you like to see included in the budget for this project? Why? Create a budget for the European History eBook project. a) What are the costs by major phases of work for making this European History eBook? b) What are the total costs for direct labor? c) What is the total estimated cost of this European History eBook?
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Mini case study Global Green Book Publisher a sort of direct costs identified Direct costs are those costs that change with the amount of production s... View the full answer
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International Business and the New Realities
ISBN: 978-0136090984
2nd Edition
Authors: S. Tamer Cavusgil, Gary Knight, John R. Riesenberger
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