Question

The delivered equipment cost for setting up a production and assembly line for two-way floating ball valves is $650,000. If the direct cost and indirect cost factors are 1.82 and 0.31, respectively, and only the direct cost factor applies to delivered equipment cost, the total plant cost estimate is approximately:a. $ 2,034,500b. $ 2,401,230c. $ 2,684,500d. $ 2,983,000

Answer 1

Answer:

a) 2, 034,500

Explanation:

the explanation is given in the file attached

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Answer 2

Answer:

$2,034,500 ; A

Explanation:

In this question, we are asked to calculate cost estimate.

One of the methods which we can use to do this is the cost factor technique.

Mathematically, the estimated total cost will be;

Ct = hCe

Where Ce refers to cost at major equipment and h is the overall cost factor.

From the question, we can identify the following;

Ce is $650,000 while h = 1.82 + 1 + 0.31 = 3.13

Inputing these values in the formula, we have;

Ct = $650,000 * 3.13 = $2,034,500