Prepare an analysis of cash requirements for the following:
Table 4: Budgeted costs for systems upgrade Alan has been working with an outside computer consultant in relation to an upgrade to BBCC's information systems. The purpose of this systems project is to do the following: Integrate information systems between the cocoa bean and chocolate bar divisions. Upgrade BBCC's software to a mid-range ERP2 (enterprise resource planning) system. The consultant has prepared the following budget for the project: Project Budget PROJECT: Networking and software upgrade Cost by development phase Hours/unit by development phase Chargeout Implemen- Total rate/hour Analysis Design tation hours/unit or unit cost Analysis Design Implementation Total cost Total by cost category Cost categories Labour Project manager Application customization and implementation End user training Process analysis and development 256 40 50 110 224 100 180 250 136 35 176 120 616 S 175 S 406 S 480 S 653 $ 167,168 $ 146,272 $ 369 $ 14,760 $ 36,900 $ 398 $ 19,900 $ 71,640 $ 301 $ 33,110 $ 75,250 $ $ 234,938 $ 330,062 S 88,808 $ 12,915 S 70,048 $ 36,120 $ 207,891 $ 402,248 64,575 161,588 144,480 772,891 S 772,891 3 3 $ 156,500 $ $ S 469,500 $ 469,500 Hardware Servers Network connections (equipment and telecommunications) Network connection fees Hardware maintenance contract 1 1 1 $ 85,400 1 $ 2,500 1 $ 10,000 $ $ $ s - $ $ 85,400 $ - $ 2,500 $ - $ $ - $ $ 87,900 S - S S $ 10,000 S 479,500 $ 85,400 2,500 10,000 567,400 S 1 567,400 Software Application software licence fees Application maintenance contract 1 1 $ 25,000 1 $ 13,000 1 $ $ $ - $ 25.000 $ $ $ - $ 25,000 $ S 13,000 S 13,000 S S 25,000 13,000 38,000 $ 38,000 Testing Testing 20 144 600 764 S 100 $2,000 $ 14,400 $ 60,000 S 76.400 $ 76.400 Reserves (10% of total estimate) Total project cost estimate $ 23,694 $ 45,736 $ $ 260,632 $ 503,098 $ 74,739 $ 835, 130 $ 144,169 S 1,598,860 144,169 1,598,860 The consultant will bill BBCC quarterly using the following completion rates. The amount is considered due at the end of each quarter for the year. Note that hardware and software costs are billed in total at the beginning of the phase they are implemented. All other costs are based on percentage completion of the phase. January February March April May June July August September October November December Analysis 25% 35% 50% 60% 75% 85% 85% 85% 90% 95% 100% YTD % completion Design Implementation 0 0 10% 0 20% 0 25% 0 30% 0 40% 10% 45% 20% 50% 25% 60% 40% 70% 50% 80% 60% 100% 75% The cash budget should account for these costs as billed by the consultant
