This paper circulates around the core theme of What contingency cost budget do you recommend for the product? (b) The target retail price for the new telephone is $165.00 per unit. The markup demanded by retailers is 50%. Based on cost factors, write a brief rationale for acceptance or rejection of th together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Contingency Allowance:
You are a project manager for the development of Motorola’s new 4G, HD,
Touch Screen Cell Phone which is supposed to take the cell phone industry
by storm. Listed below are the initial cost estimates for the materials and
labor for one of the phones:
|
ITEM
|
COST
ESTIMATE
|
TYPE
OF ESTIMATE
|
|
Case
|
$20.00
|
Order of Magnitude
|
|
Handset
|
$12.00
|
Definitive
|
|
Labor
|
$2.00
|
Definitive
|
|
Speaker
|
$2.50
|
Budget
|
|
Mouthpiece
|
$5.50
|
Budget
|
|
Antenna
|
$1.70
|
Definitive
|
|
Keypad
|
$3.00
|
Order of Magnitude
|
|
Circuit boards (handset)
|
$6.50
|
Budget
|
|
Circuit boards (base unit)
|
$8.50
|
Definitive
|
|
Battery
|
$1.20
|
Order of Magnitude
|
|
Charger
|
$16.00
|
Order of Magnitude
|
|
Total cost
|
$78.90
|
NA
|
The estimating department currently defines
estimate accuracy as follows:
|
Order of Magnitude
|
-25%, +85%
|
|
Budget
|
-10%, +25%
|
|
Definitive
|
-5%, +10%
|
(a) What contingency cost budget do you recommend for the product?
(b) The target retail price for the new telephone is $165.00 per unit. The
markup demanded by retailers is 50%. Based on cost factors, write a brief
rationale for acceptance or rejection of the project, including any
recommendations you have regarding the cost estimates.
