i-MS Time Sdn Bhd: May 2014

Friday 23 May 2014

Specification of Our Product (Prototype)

eco-friendly laundry drier

Presentation of Project Session

Our crews with Dr. Radzi ( Supervisor & Lecturer of PDD subject)

Bro. Irfan (Manager Project) take 2nd place present from Dr. Mustafizul Karim ( Examiner Presentation)

Finishing Project Part 2 ( Laundry Dryer )

Put the cover on the frame

Bro. Fakhrullah try to test zip function

Bro. Firdaus try to fit the cover with the frame

Bro. Irfan hold the air heater

The air heater is put below the laundry

Process of Installation of all Parts of Laundry Dryer is done

Finishing Project Part 1 ( Frame of Laundry Dryer)

Bro. Firdaus try to combine the pvc pipe with 'L' connector pipe

Painting session

Frame Laundry Dryer

Thursday 22 May 2014

ASSIGNMENT 17.4

QUESTION:

A manufacturer of a small hydraulic turbine has the annual cost data given. Calculate the manufacturing cost and the selling price for the turbine:

Raw material and components costs $2,150,000

Direct labor 950,000

Direct expenses 60,000

Plant manager and staff 180,000

Utilities for plant 70,000

Taxes and insurance 50,000

Plant and equipment depreciation 120,000

Warehouse Expenses 60,000

Office Utilities 10,000

Engineering expenses (plant) 90,000

Engineering staff and salaries (plant) 30,000

Administrative staff salaries 120,000

Sales staff, salaries and commissions 100,000

Total Annual Sales: 60 units

Profit Margin: 15%

SOLUTION:

Variable costs

Raw material and components costs $2,150,000

Direct labor 950,000

Direct expenses 60,000

Engineering expenses (plant) 90,000

Engineering staff and salaries (plant) 30,000

Total Variable Costs $3,280,000

Factory Expenses

Utilities for plant $70,000

Taxes and insurance 50,000

Plant and equipment depreciation 120,000

Warehouse Expenses 60,000

Total Factory Expenses $300,000

General and Administrative Expenses (G & A)

Plant manager and staff $180,000

Office Utilities 10,000

Administrative staff salaries 120,000

Total G & A $310,000

Manufacturing Cost = Variable costs + Factory Expenses +
General and Administrative Expenses

= $3,280,000 + $300,000 + $310,000

= $3,890,000

Sales, staff, salaries and commissions: $100,000

Total Cost = Manufacturing costs + Sales, staff, salaries and commissions
= $3,990,000

Manufacturing cost for a turbine = $3,990,000

Profit Margin = Profit / Sales
0.15 = Profit / Sales -> equation 1
Sales = Profit + Total Cost
Sales = (0.15)Sales + $3 990 000 -> equation 2
Interception equation 1 & 2
Sales = $ 4 987 500.00

Sales = Selling Price

Total Annual Sales = 60 units

Selling Price for One Turbine = Selling Price / 60 = $4,987,500.00 / 60

Selling Price = $83,125.00 per unit

ASSIGNMENT 17.3 BREAK-EVEN POINT

QUESTION

The type of tooling to make for a manufacturing process depends on the expected total quantity of parts. Tooling made from standard components and less wear-resistant materials (soft tooling) can be made more quickly and cheaply than conventional tooling made from hardened steel (hard tooling). Use the concept of break-even point to determine the production quantity for which soft tooling can be justified.

The following cost data applies:

Soft tooling Hard tooling

Tool Tooling cost C_S $600 C_H $7500

Setu Setup cost S_S $100 S_H $60

Unit Unit Part cost C_PS $3.40 C_PH $0.80

ANSWER

The break-even point is the sales or production volume at which sales and costs balance.

C_H + (Q_BEP/b) S_H+ C_PH Q_BEP = C_S + (Q_BEP/b) S_S+ C_PSQ_BEP

Break-even point,

Q_BEP= C_H-C_S/ [(S_S- S_H}/b) + (C_{PS -}C_PH)]

= 7500 – 600/ [((100 – 60)/500) + (3.4 – 0.8)]

= 2574.63

= 2575 units

Assigment Chapter 17

Problem 17.2

QUESTION:

Many consumers item today are designed in the United State and manufactured over-seas where labor cost is much lower. A middle range athletic shoe from a name brand manufacturer sells for $70 in the U.S. The shoe company buys the shoe from an off-shore supplier for $20 and sells to the retailer for $36. The profit margin for each unit in the chain is: supplier-9%, shoe company-17%, retailer-13%. Estimate major categories of cost breakdown for each unit of chain. Do this as a team problem and compare the results for the entire class.

No	Major Catogories	Detail Items	Cost (USD)
1.	Athletic Shoe Company	Materials	7.00
		Supplier’s operating profit	2.00
		Production Labor	3.00
		Rent, equipment	2.50
		Duties	4.00
		Shipping	1.00
		Total Cost	19.50
2.	Retailer	Sales, Distribution, admin	5.00
		Promotion and adverstising	4.00
		Company’s operating profit	7.00
		Research and development	30.00
		Total Cost	46.00
3.	Consumer	Personnel	16.00
		Retailer’s rent	19.00
		Retailer’s operating profit	20.00
		Others	16.00
		Total Cost	66.00

ASSIGNMENT 17.1

QUESTION:

In an environmental upgrade of a minimill making steel bar, it is found that a purchase must be made for a large cyclone dust collector. It is the time of the year for capital budget submissions, so there is no time for quotations from suppliers. The last unit of that type was purchased in 1985 for $35,000. It had a 100ft³/min capacity. The new installation in 2012 will require 1000ft³/min capacity. The cost escalation for this kind of equipment has been about 5 percent per year. For budget purposes, estimate what it will cost to purchase the dust collector.

Answer:

To answer this question, equation below is provided:

C₁ = C₀ (L₁/L₀)^x(Cost-Size Relationship ~page799)

C₀= $35,000
L₀= 100ft³/min
L₁= 1000ft³/min
C₁= ?

Based on Table 17.4 in the text book, x for dust collector= 0.61. Because of economies of scale, the new unit has 10 times the capacity as the unit purchased in 1985 will not cost 10 times more. However, the purchase cost will have increased because of inflation in the 27 years since it was purchased in 1985. Assuming cost inflation in of 5% per year, the original cost of $35,000 is now equivalent to:
P= F(1+i)n
P=35000(1+0.05)²⁷
= 35000(2.92526)
= $130 671.00

Thus, the cost estimation can be calculated as: