CHAPTER SEVEN

7 COST ANALYSIS

The total cost of this machine is calculated by subdividing its cost in to raw material
cost, standard part cost, machining cost and labor cost.

7.1 MATERIAL COST

Table 7.1: Raw material cost

Material
cost per
No. Component Name Material Quantity unit (birr) Total Cost
1 Frame Mild steel 1 123405.5 123405.5
2 Mold Cast iron 1 81,282.3 81,282.3
3 Press Mild steel 1 43373.3 43373.3
4 Top press Mild steel 1 21023.4 21023.4
5 Link 1 Mild steel 1 3340.5 3340.5
6 Link 2 Mild steel 1 1545.4 1545.4
7 Slider Mild steel 2 748.3 748.3
8 Main shaft Mild steel 1 1234.5 1234.5
Compactor shaft
9 Mild steel 1 3457 3457
10 Trough Mild steel 1 1265.2 1265.2
11 Key Mild steel 6 821 4926
12 Sprocket Mild steel 2 1293.3 1293.3
13 Pulley Mild steel 2 1003.7 1003.7
Total Cost 287,898.4

7.2 Cost of standard parts

Table 7.2: cost for standard part

No. Parts Quantity Unit price (birr) Total price (birr)

1 Bearings 5 1000 5000

2 Stepper motor 1 40000 38000

 3 DC motor 1 20000 20000

4 Bearing housing 5 1000 5000

5 Chain 1 5000 5000

6 Wheel 4 1000 4000

7 Belt 1 450 450

8 Bolt 20 40 800

Total Cost 78250

7.3 Machining cost

Machining cost is a cost that expenses for production process of products. From asking
the local factories the cost of machining is calculated as below.

Table7.3: Machining cost

No. Parts Hour Price/Hour Total

price(birr)

1 Drilling 10 150 1500

2 Milling 13 200 2600

3 Turning 6 180 1080

4 Welding 7 120 840

`Total 6020

7.4 Labor cost

It is the wages of paid to workers during an accounting period on daily, weekly and
monthly. It is simply means a cost expenses for workers.
Table7.4: Labor Cost

No. Type of worker Number of workers Cost paid for workers

(Birr)

1 Mechanical Engineer 2 35000

2 Electrical Engineer 2 20000

3 Labor 3 9000

4 Assistant 2 4000

Total cost 68,000

Total machine cost = Raw material cost + standard part cost + Machining cost + Labor
Cost

Total machine cost = 287,898.4 + 78250 + 6020 + 68,000

Total machine cost = 440,168.4 birr

Profit for design team is 10% from each machine

Total Cost= 440,168.4 + 44,016.84

Total cost = 484,016.84 birr

The total machine cost will be ± 9.4% of the total cost due to inflation of money.