Engineering costs summary Choose a concept. Make a small summary of the concept. Make 3 annotated bibliographies for the two sources and the book (100 word

Engineering costs summary Choose a concept. Make a small summary of the concept. Make 3 annotated bibliographies for the two sources and the book (100 words each). Develop a thesis statement. APA formatting. #GEA 1
Prewriting Assignment and Submission
Impact of Human and Cultural Diversity on Globalization
Due: Sunday, January 27, by 11:59 pm
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This assignment is part 1 of the #GEA1: Impact of Human and Cultural Diversity on
Globalization assignment.
The rubric for this assignment is located at the end of the assignment description.
Overview:
For this prewriting assignment, students will engage with the early research and writing
steps necessary to produce a high-quality essay.
Students will:
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Choose a concept from your assigned chapter
Explain the concept in your own words, and briefly explain why you find it interesting
Conduct research
Develop a thesis statement (Links to an external site.)Links to an external site.
Engage in a critical review and feedback process designed to:
1. hone students’ abilities to engage in constructive and professional criticism necessary in
most workplace settings;
2. help peers improve and polish their work prior to submitting to a public audience; and
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Help students improve, revise (Links to an external site.)Links to an external site., and
polish their own work through the process of determining what they find well or poorly
done in the work of others.
Write an annotated bibliography (Links to an external site.)Links to an external site. of
your sources
Step 1: Choose and summarize your concept
After re-reading your assigned chapter, choose one concept that you find interesting in some
way. It may be something you wish to know more about, something that you want to
understand better, something that bothered you, something you found fascinating, etc.
Once you have chosen the concept you want to write about, summarize the concept in your
own words. You may wish to look up additional resources to help you understand the
concept more clearly. In any event, you should offer in-text citations (Links to an external
site.)Links to an external site. for whatever sources you use to write your summary (full
citations not necessary for this part).
As part of your summary, explain why this concept interests you.
Step 2: Conduct research
Next, you will conduct research. You must locate two credible sources outside of your
textbook. One of your credible sources will agree with the perspective offered by the author
of your textbook. The other credible source will disagree with the perspective offered by the
author of your textbook. If you have exhausted all resources and simply cannot find sources
of opposing/different perspectives, then you must choose another concept.
Read the UNC Chapel Hill Writing Center Handout on “Evaluating Print Sources,” (Links to
an external site.)Links to an external site. and utilize the CRAAP Test (Links to an external
site.)Links to an external site. to ensure that you are using credible sources. Sources that are
not found to be credible will result in an evaluation of 0 for that part of the grading rubric.
Step 3: Annotated Bibliography (Links to an external site.)Links to an external
site.
Now that you have gathered all your resources, you will develop an annotated bibliography.
Your bibliography will include only 3 entries:
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Your textbook
Credible source that agrees
Credible source that disagrees
Include the information below, and structure accordingly:
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Name of author(s); date published; title of work; organization that published the work
(e.g., book publisher, government organization, journal name, etc.)
Type of source (e.g., academic article, book, government or organizational report, etc.)
Full APA (Links to an external site.)Links to an external site. source citation (provide a
complete APA (Links to an external site.)Links to an external site. style citation that is
consistent with the source type and APA (Links to an external site.)Links to an external
site. guidelines for that particular source type; utilize the resources suggested to you to
properly complete this step)
Bibliographic annotation (100-150 words, required for all 3 sources).
Your bibliographic annotations must:
1. Summarize the central idea (argument/thesis) of the source
2. Briefly explain the qualifications of the source (author(s), organization, etc.) to speak as
an authority on the topic
3. Describe what the resource is (e.g., if the resource is a report, explain what the report
covers, why it was made, what audience it is intended for, etc.; if the resource is a book,
explain what the book is about, what it covers, what audience it is intended for, etc.) and
how the resource is useful to your essay
Step 4: Thesis Statement (Links to an external site.)Links to an external site.
Now that you have a firm grip on your concept and the adjacent and opposing arguments,
you will develop your thesis statement. Starting with a strong, well-informed thesis
statement (Links to an external site.)Links to an external site.will help you with the overall
organization and clarity of your essay.
As you are writing your essay, you may find that your essay does not go in the direction you
expected, or perhaps you will change your mind regarding your position on your concept.
That is fine, and you can amend your thesis statement. In fact, most authors end up
amending their thesis statements after they have completed their work to more accurately
reflect the end result of the writing process. However, starting with a strong, clear thesis will
help anchor your essay and focus your writing.
Step 5: Organize your prewriting assignment and submit
Organize your prewriting assignment as laid out above.
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Include your name, course title and section, and the date at the top
Clearly label each section for easy identification
Remember that this prewriting assignment is not an essay, and should not be organized
as such
Submit your prewriting assignment NO LATER THAN Sunday, January 27, by 11:59 pm
Rubric
Assignment 1: Prewriting
Assignment 1: Prewriting
Criteria
This criterion is linked to a Learning OutcomeConcept
To earn marks for this section, students must specify and explain the
concept they have chosen to focus on clearly and concisely.
Ratings
2.0 pts
Concept is
named and
clearly
explained.
1.0 pts
Concept is
named but
not clearly
explained
0.0 pts
Concep
not nam
or is no
defined
This criterion is linked to a Learning Outcome1 source that agrees
To earn marks in this section, students must include an annotation
for one source that is in agreeance with the position of the author of
the textbook. The source cannot include the author of the textbook as
one of the authors of the source that agrees.
2.0 pts
Complete
0.0 pts
Incomplete
1 source that agrees is either not
included, or the authors of the so
include the author of the
Globalization textbook.
This criterion is linked to a Learning Outcome1 source that disagrees
To earn marks in this section, students must include an annotation
for one source that disagrees with the position of the author of the
textbook. The source cannot include the author of the textbook as
one of the authors of the source that disagrees.
2.0 pts
Complete
0.0 pts
Incomplete
1 source that disagrees is either n
included, or the authors of the so
include the author of the
Globalization textbook.
2.0 pts
Complete
0.0 pts
Incomplete
Not all three sources are annotat
the sources are annotated in a wa
that does not fulfill the requirem
described in the assignment.
This criterion is linked to a Learning OutcomeAnnotated
Bibliography
All three sources listed in the assignment (the textbook, a credible
source that agrees, and a credible source that disagrees) are
annotated as specified in the assignment.
Assignment 1: Prewriting
Criteria
This criterion is linked to a Learning OutcomeThesis statement
To earn marks for this section, students must include a 1-2 sentence
thesis statement as outlined in the assignment, and as described by
the UNC “Thesis Statements” handout.
Total Points: 10.0
Ratings
2.0 pts
Complete
0.0 pts
Incomplete
Thesis statement is not included,
not clearly defined, exceeds 1-2
sentences, or is unintelligible.
Chapter 2
Engineering Costs
and Cost Estimating
1
Learning Objectives
 Understand various cost concepts
 Breakeven charts
 Understand various cost estimation models
 Be able to estimate engineering costs with various
models
 Cash Flow Diagrams
2
Engineering Costs
Fixed costs
 The costs that do not change during the time horizon of
the study. They may relate to the constant costs of
equipment, utilities, rent, etc.
 Constant, independent of the output or activity level.
 Examples:
 Property taxes, insurance
 Management and administrative salaries
 License fees, and interest costs on borrowed capital
 Rental or lease
3
Example
A manufacturing plant that assembles television sets has
variable output volume from 200 sets to 350 sets a day.
The building for both manufacturing and warehousing has
an area of 80, 000 square feet. It employs about 250
people. It produces all of the components that go into the
assembly.
An example for fixed cost in this plant is ——————-.
A) Equipment Cost
Equipment cost stays the same
B) Power cost
regardless the level of output once
C) Labor Cost
the plant has been designed to
produce at a certain level.
D) Material Cost
4
Engineering Costs
Variable costs
 Costs that vary during the time horizon of the study. Over
the long-term all costs are variable.
 Depends on the level of output or activity.
 Proportional to the output or activity level.
 Example:
 Direct labor cost
 Direct materials
5
Example
A manufacturing plant that assembles television sets has
variable output volume from 200 sets to 350 sets a day.
The building for both manufacturing and warehousing has
an area of 80, 000 square feet. It employs about 250
people. It produces all of the components that go into the
assembly.
An example for variable cost in the plant is —————.
A) Building cost
B) Equipment Cost
Labor cost depends on the output level
C) Labor Cost
D) Property Taxes
6
Relevant Formulae
 Total Variable Cost = Unit Variable Cost * Quantity
 TVC = VC * Q
 Total Cost = Total Fixed Cost + Total Variable Cost
 TC = FC + VC * Q
 Total Revenue = Unit Selling Price * Quantity
 TR = SP * Q
where
TVC = Total variable cost
VC = Variable cost per unit
Q = Production/Selling quantity
FC = Total Fixed costs
TR = Total revenue
SP = Selling price per unit
7
Example
A company produces a single, high-volume product. One
year its production volume was 780,000 units, its fixed
costs were $3.2 million and its variable costs were $16
per unit. What was the company’s total cost for the year?
A) $3,200,000
TVC = 780,000 x 16 = $12,480,000
B) $3,200,016
FC = $3.2M
C) $12,480,000
D) $15,680,000
TC = FC+TVC = $15,680,000
8
Breakeven Analysis
Breakeven point: The level of business activity at which
the total costs to provide the products (goods), or services
are equal to the revenue generated. That is:
Total costs = Total revenue
Total costs = Total fixed costs + Total variable costs
•Applications of Breakeven analysis:
– Determining minimum production quantity
– Forecast production profit / loss
9
Breakeven Analysis
Total Revenue
$
Profit
Total Costs
Variable Costs
Fixed Costs
Loss
Break-even Point
Production Quantity
10
Example 2-1
Total Revenue
= 35X
$1000
$800
Total Costs
= $225 + 20X
$600
Variable Costs
= 20X
Profit
$400
$200
$0
Fixed Costs
= $225
Loss
5
10
15
20
25
X
# of Customers
11
Example
A manufacturing firm’s specialty circuit board division has
annual fixed costs of $100,000
and variable costs of $20.00 per board.
If they charge $100 per circuit board, how many circuit
boards must they produce and sell in order to break
even?
To break even, total costs = total revenue,
where total costs = total fixed costs + total variable costs.
$100,000 + $20X = $100X
X = $100,000/$80 = 1250 circuit boards.
12
Example
In breakeven analysis, the profit at the breakeven point is
equal to
A) The total cost
B) Zero
The total revenue is equal to the total cost.
Therefore…
C) The total revenue
D) The variable cost multiplied by the number of items
sold
13
Marginal Costs and Average Costs
Marginal Costs
 Used to decide whether an additional unit should be
made, purchased, or enrolled in.
 the variable cost for one more unit of output
 Capacity Planning: excess capacity
 Basis for last-minute pricing
Average Costs:
 total cost divided by the total number of units produced.
 Basis for normal pricing
14
Example
What is marginal cost? Explain with an
example.
 the cost of producing one additional unit.
 used for making a decision of whether or not it is
economical to produce another unit of the same item.
 Example: Taking the fifth person in a taxicab that can take
only four passengers.
 For the fifth person, a second cab has to be hired.
 The cab fare for the second cab is the marginal cost.
15
Engineering Costs and Cost Estimating
Key Question: Where do the numbers come from that we
use in engineering economic analysis?
• Cost estimating is necessary in an economic
analysis
• When working in industry, you may need to consult
with professional accountants, engineers and other
specialists to obtain such information
16
Albert’s Charter Bus Venture (example)
Albert plans to charter a bus to take people to see a wrestling match
show in Jacksonville. His wealthy uncle will reimburse him for his
personal time, so his time cost can be ignored.
Item
Bus Rental
Gas Expense
Other Fuel Costs
Bus Driver
Cost
$80
$75
$20
$50
Total Costs
$225.00
Item
Ticket
Refreshments
Total Costs
Cost
$12.50
$ 7.50
$20.00
• Which of the above are fixed and which are variable costs?
• How do we compute Albert’s total cost if he takes n people to Jacksonville?
17
Albert’s Charter Bus Venture (example)
 Answer: Total Cost = $225 + $20 n.
Graph of Total Cost Equation:
Total cost
n
18
marginal cost
-The cost to take one more person
Marginal and Average Costs
average cost
$300.00
– Average
cost: the cost per person
Avg.$250.00
Cost = TC/n
Cost
Avg.$200.00
Cost = ($225+$20n)/n
= $20 + $225/n
Average
Marginal
$150.00
 For
n = 30, TC = $885
$100.00
Trip Ticket
Marginal and Average Costs
Avg. Cost = $885/30 = $29.50
$300.00
$50.00
$250.00
1
3
5
7
9
11
Cost
$200.00
$0.00
Average
$150.00
13
19
17
15
Marginal
23
21
Trip Ticket
$100.00
Number of People
$50.00
$0.00
1
3
5
7
9
11
13
15
17
19
21
23
Number of People
19
Question: Do we have enough information yet to
decide how much money Albert will make on his
venture? What else must we know?
 Albert needs to know his total revenue
 Albert knows that similar ventures in the past have charged
$35 per person, so that is what he decides to charge
 Total Revenue = 35n (for n people)
Total profit =
Total Revenue – Total Cost:
35n – (225 + 20n) = 15n – 225
Question:
How many people does Albert need to break even?
(not lose money on his venture)
20
Albert’s Charter Bus Venture
Question:
$1,000.00
How
many people does Albert need to break even?
(not lose money on his venture)
$800.00
Solve$600.00
15 n – 225 = 0 => n=15
Total Cost
more$400.00
than 15, he makes money
Cost
Revenue
$200.00
Profit
$0.00
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
($200.00)
($400.00)
Number of People
21
Albert’s Charter Bus Venture (example)
Where is the Loss Region?
Where is the Profit Region?
Where is the Breakeven point?
Albert’s Charter Bus Venture
$1,000.00
$800.00
Total Cost
$600.00
Cost
$400.00
Revenue
$200.00
Profit
$0.00
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
($200.00)
($400.00)
Number of People
22
Exercise 2.3
A new machine comes with 100 free service hours over the
first year. Additional time costs $75 per hour. What are
the average and marginal costs per hour for the following
quantities?
a) 75 hours
23
Exercise 2.3
A new machine comes with 100 free service hours over the
first year. Additional time costs $75 per hour. What are
the average and marginal costs per hour for the following
quantities?
b) 125 hours
24
Exercise 2.3
A new machine comes with 100 free service hours over the
first year. Additional time costs $75 per hour. What are
the average and marginal costs per hour for the following
quantities?
c) 250 hours
25
Exercise 2.7
A privately owned summer camp for youngsters has the
following data for a 12-week session:
 Charge per camper
$120 per week
 Fixed costs
$48,000 per session
 Variable cost per camper
$80 per week
 Capacity
200 campers
a) Develop the mathematical relationships for total cost and total revenue.
26
Exercise 2.7
A privately owned summer camp for youngsters has the
following data for a 12-week session:
 Charge per camper
$120 per week
 Fixed costs
$48,000 per session
 Variable cost per camper
$80 per week
 Capacity
200 campers
b) What is the total number of campers that will allow the camp to
just break even?
$48,000 = $480 x
27
Exercise 2.7
A privately owned summer camp for youngsters has the
following data for a 12-week session:
 Charge per camper
$120 per week
 Fixed costs
$48,000 per session
 Variable cost per camper
$80 per week
 Capacity
200 campers
c) What is the profit or loss for the 12-week session if the camp
operates at 80% capacity
28
Exercise 2.15
A privately owned summer camp for youngsters has the
following data for a 12-week session:
 Charge per camper
$120 per week
 Fixed costs
$48,000 per session
 Variable cost per camper
$80 per week
 Capacity
200 campers
d) What are marginal and average costs per camper at
80% capacity?
at x = 160
Marginal cost is the slope of the equation which is
equal to $960
Average cost is Total Cost/x
= ($48,000 + $960 * 160)/160 = $1260
29
Sunk Costs
 Costs associated with decisions already made.
 Money already spent as a result of a past decision.
 Cost that has occurred in the past and has no
relevance to estimates of future costs and revenues
related to an alternative
 Must be ignored because current decisions can not
change the past
30
Sunk Costs
A sunk cost is money already spent due to a past decision.
 As engineering economists we deal with
present and future opportunities
 We must be careful not to be influenced by the past
 Disregard sunk costs in engineering economic analysis
31
Sunk Costs
Example:
Suppose that three years ago your parents bought you a
laptop PC for $2000.
 How likely is it that you can sell it today for what it cost?
 Suppose you can sell the laptop today for $400. Does the
$2000 purchase cost have any effect on the selling price
today?
The $2000 is a sunk cost. It has no influence on the present
opportunity to sell the laptop for $400. ( stock now costs $20
but you bought for $80)
32
Example
All of the following are usually included in an engineering
economic analysis except
A) Fixed costs
B) Variable costs
C) Sunk costs
D) Total revenue
33
Opportunity Costs
 Using a resource in one activity instead of another
 Cost of the foregone opportunity and is hidden or
implied
 Going for $3000 trip and miss the opportunity of earning
$5000 in summer internship
34
Sunk and Opportunity Cost-1
Example 2-2. A distributor has a case of electric pumps. The
pumps are unused, but are three years old. They are becoming
obsolete. Some pricing information is available as follows.
Item
Amount
Type of Costs
Price for case 3 years ago
$7,000
Sunk cost
Storage costs to date
$1,000
Sunk cost
35
Sunk and Opportunity Cost-2
Example 2-2. (cont.)
Item
Amount
Type of Costs
List price today for a case of
new and up to date pumps
$12,000
Can be used to help
determine what the lot is
worth today.
Amount buyer offered for case
2 years ago
…
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