Question

The contractor proposed $x,xxx,xxx for manufacturing labor contemplating the following full time equivalent (FTE) for the three year period of performance, as follows: 3, 4.5, 4. The annual accounting hours/FTE used by the company is 1,800 hours per FTE. The current Direct Labor rate is $31.00 and the contractor has proposed a 2.5% escalation rate for years two and three. What are the manufacturing labor dollars per year over the three year period of performance?

Answer 1

$659,277

Step-by-step explanation:

The computation of the manufacturing labor dollars per year over the three year period of performance is shown below:

For 3 year it is

= 3 × 1,800 hours × $31

= $167,400

For 4.5 years, it is

= 4.5 × 1,800 hours × $31 × 1.025

= $257,377.50

Foe 4 years, it is

= 4 × 1,800 hours × $31 × 1.025 × 1.025

= $254,499.50

So, the manufacturing labor dollars per year is

= $167,400 + $257,377.50 + $254,499.50

= $659,277