The delivered equipment cost for a fully equipped CNC machining system is $1.6 million. The direct cost factor is 1.52 and the indirect cost factor is 0.31. Estimate the total plant cost if the indirect cost factor applies to (a) the delivered equipment cost only, and (b) the total direct cost.
What will be an ideal response?
(a) h = 1 + 1.52 + 0.31 = 2.83
CT = 2.83 (1,600,000)
= $4,528,000
(b) h = 1 + 1.52 = 2.52
CT = [1,600,000(2.52)](1.31)
= $5,281,920
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