PM Workbook (BPP page 61)

Dear Tutor,

Activity 1: Targeting costing

House it Co produces rabbit hutches. Selling price $125 margin 25%.

Cost:
-Timber 10m @$48
-Felt roofing 2sq.m @$17.50/sq.m
-Wire 1m @$1.50m
-Labour @$7/hour
-Variable overhead @$1.50 per labour hour

1. Target cost my answer $93.75 same as BPP.

2. Expected cost to make hutch my answer $93.00. BPP $101.50.
BPP’s answer assumes it take take 2 hours to make the hutch. I assumed 1 hour as no duration given.

-Robbie.