Question

Given the following assumptions, develop a cost estimate that integrates all of the cost of elements into a final bid price to the customer.

Function points in the project: 264
Software engineers assigned to this team:
5 Function points productivity per software engineer:
4 per month Workdays per typical month:
22 Productive hours per typical workday:
8 Gross hourly wage rate per software engineer does not include fringe benefits):
550 per hour Overhead (fringe benefit other direct overheand) rate:
32% G&A rate :
11.5% Proposed profits:
10% What is the total cost to the customer for the project?

Answer 1

To calculate the total cost to the customer for the project, follow these steps: calculate the total productive hours per month, calculate the total function points that can be produced, calculate the total cost of labor, calculate the total cost of overhead, calculate the total cost of G&A, calculate the total proposed profits, and calculate the final bid price.

Step-by-step explanation:

To calculate the total cost to the customer for the project, we can follow these steps:

1. Calculate the total productive hours per month by multiplying the number of workdays per month by the productive hours per workday: 22 days * 8 hours = 176 hours
2. Calculate the total function points that can be produced by the team in a month by multiplying the function points productivity per software engineer by the number of software engineers: 4 points/ engineer * 5 engineers = 20 points
3. Calculate the total cost of labor by multiplying the total productive hours per month by the gross hourly wage rate per software engineer: 176 hours * $550/hour = $96,800
4. Calculate the total cost of overhead by multiplying the total cost of labor by the overhead rate: $96,800 * 32% = $31,136
5. Calculate the total cost of G&A by multiplying the total cost of labor by the G&A rate: $96,800 * 11.5% = $11,132
6. Calculate the total proposed profits by multiplying the total cost (labor + overhead + G&A) by the proposed profits rate: ($96,800 + $31,136 + $11,132) * 10% = $13,006.8
7. Calculate the final bid price to the customer by adding the total cost (labor + overhead + G&A + proposed profits) to the one-time charge: ($96,800 + $31,136 + $11,132 + $13,006.8) + $31.50 = $152,106.3

Therefore, the total cost to the customer for the project is $152,106.3.