Estimate Cost of

Products and Services

Grade 10 - Anthurium

Entrepreneurship 10
Mrs. Zenaida C. Autriz
Capital Cost

A payment of interest for

the duration of the loan.

2
Cost

Represents form of
payment.

3
Direct Cost
Payment and expenditure made
for the product or service that
became part of the product like
acquisition of raw materials and
salaries/ wagas or the workers.

4
Indirect Cost
Sum of other expenses or cost
generated from the business and
also know as overhead expenses.

5
Material Cost

All materials needed both for

direct manufacturing and those
needed for the functioning of
the business.

6
Production

The process of making

or manufacturing goods.

7
Staff Cost

Are salaries or wages plus additional

costs as payments or incentive on
overtime works, social security, annual,
and sick leaves of workers

8
Production Cost Benefits Checklist

You can draft your estimates without

worries
You can anticipate for estimated profits
You can identify the expensive or cheap
materials you need
You can have a chance to do the cost-
cutting
You can sense the improvements of your
business 9
Steps in Computing your Cost
List down your needed raw materials
Determine the other raw materials you need
in the operation of your business and
services
Specify your estimate for the needed
manpower
Come up with the facilities and machines
required in the operation of your chosen
business
Survey for the quality but the cheapest
source of materials you need 10
 Description Estimated Cost

Monthly wage and allowance for 4 4 workers x P5,000.00 + 1

workers receiving Php 5,000.00 a supervisor x P10,000.00
month with a supervisor recievin Php = P30,000.00/month

Direct Cost 10,000.00 yearly wage and allowance

for 4 workers and 1 supervisor
Calculation for the total number of
hourspent by the workers in a year
Hourly labor cost = Total yearly wage
Computation bill/total number of hours worked in a
year
P30,000.00 x 12 months
=P360,000.00/yearly
47 weeks x 40 hours/week
4 workers = 7,520 hours
P360,000.00/7,520 hrs
=P47.87/hour

Hours needed to complete a wood 40 x 2

bench it only takes two workers each =8 hours
consuming 4.7 m to do it. Labor time
taken x no. of workers = total no. of
hour
Direct labor cost of the wood bench: 8.0 Hrs x P47,87/hour
No. of hours x hourly labor rate = total =P382.96
labor cost per wood bench Considered – P380.00 11
TABLE Category
20XX 20XX 20XX

SLIDE
0 400,000 1,600,000
Category 500,000 4,000,000 16,000,000
Category 75 80 90
Category 5,625,000 48,000,000 216,000,000
Lorem ipsum
Category 0 0 0
dolor sit amet,
consectetuer Category 5,625,000 48,000,000 216,000,000
adipiscing elit, sed Category 1,687,500 9,600,000 21,600,000
do eiusmod tempor Category 562,500 2,400,000 10,800,000
incididunt ut labore.
Category 281,250 2,400,000 4,320,000
Category 7,593,750 52,800,000 187,920,000

12
Applying rules of Production to an Enterprise
1. What will be your decision when the TR (income) of your business is
equal to TC (espenses)?
EXAMPLE: TR = TC
2,000 = 2,000
DECISION: There is a need to maintain in your production.
2. What will you do when the TR of your enterprise is less than the TC?
EXAMPLE: TR = TC
5,000 = 8,000
DECISION: The production needs to stop.
3. What action do you need to take if you have greater TR then TC?
EXAMPLE: TR = TC
10,000 = 7,000
DECISION: You need to produce more.
13
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