A new entrepreneur wants to estimate the costs of an offsite team-building event for her 14 employees. She was able to gather the following information on a 3-day program in which she is interested. Use the unit technique to estimate the cost per employee of this event. Assume there will 100% participation in all activities.
|Cost Elements||Cost Rate|
|Transportation Costs (the site is 60 miles away.)||Van rental of $109 pay day per 14 people. The van gets 16 mpg and the gas is $3.10 per gallon. Insurance costs $24 per person|
|Accommodation Costs (for 3 days and 3 nights)||A double-bed room holds 2 people and has a rate of $119 per night per room. Meals are $45 per day per person. A conference room costs $180 per day for a karaoke night.|
|Activities costs||A paintball game costs $55 per person. A night journey and a day hike, each costs $35 per person. A problem-solving and team-building exercise costs $160 per 14 people. A karaoke night costs $230 per 14 people for equipment and a DJ.|
Cost Estimating and Estimating Models
The per-unit model is a simple but useful model in which a cost estimate is made for a single unit, then the total cost estimate results from multiplying the estimated cost per unit times the number of units.
Answer and Explanation: 1
1. Transportation cost:
Van rental (fixed) = 109*3 = 327
Insurance cost = 24*14= 336
Fuel cost = 3.8*3.1 = 11.60
(For 60 miles, the fuel needed =...
See full answer below.
Become a member and unlock all Study Answers
Start today. Try it nowCreate an account
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 8 / Lesson 5
Overspending can be prevented with cost management, which is a crucial part of project management. Discover more about cost management, including how it is implemented and what software is available.