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Engineering Economics Assignment # 1

by
Anum Zaib (11-CP-16)

COST ELEMENTS OF LUCKY CEMENT

Variable Costs
o Direct Material Cost :
Limestone
Clay/Sand
Gypsum
Iron Ore
Other raw materials
o Direct Labour Cost :
Wages for staff/labour in:
Quarrying and Crushing
Blending and Storage
Raw Milling
Burning/Kiln Plant
Quality Assurance
Packaging and despatching
o Direct Expense Cost :
Labour Tax per number of units produced
Salesmen commissions
Cost for transportation of cement
Overhead Costs
o Factory Overhead Cost :
Fuel cost (Gas/Coal/Furnace Oil)
Electricity bills
Cost for standardized machinery and equipment
o Administration Overhead Cost :
Cost for depreciation of sales offices
Wages and commissions for sales and marketing representatives
Cost for travel for sales representatives for business growth
o Selling Overhead Cost :
Cost for promotion of product (advertisements/promotional meetings and seminars, etc.)
Cost for warehousing
o Distribution Overhead Cost :
Cost for shipping/delivery from factory site to customer site
Commission for sales representatives