Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River,...

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Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management Cost Analysis and Estimating for Engineering and Management Chapter 2 Labor Analysis

Transcript of Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River,...

Page 1: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-1

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Cost Analysis and Estimatingfor Engineering and Management

Chapter 2

Labor Analysis

Page 2: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-2

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Overview

Labor and Labor CostsDetermining CostsLabor Hour

Time Study Work Sampling Wages and Fringe Benefits

Incentive Pay

Page 3: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-3

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Labor

Direct Labor“Touches” the ProductChanges – Adds Value to the Product

Indirect LaborSupports Direct Labor Efforts

Direct Labor Accounts for About 15% of the Product Cost

Page 4: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-4

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Labor Costs

Worker Pay WagesFringe Benefits

Equipment CostsCapital CostOperating Costs

Page 5: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-5

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Determining Costs

Products in ProductionHistorical Cost RecordsMeasurement of TimeClock Time vs. Productive Time

Proposed ProductsNeed an Estimate

Labor Cost = Time x Wage

Page 6: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-6

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Labor Hour

One Worker Working for One Hour Labor Year

52 Weeks x 40 Hours = 2080 Hours Labor Month

2080 / 12 = 173.3 Hours Should Be Time Working NOT Time at Work

Page 7: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-7

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Motivation

Incentive PayMore Production = More PayRequires “Fair” StandardsLeads to Other Problems

Non-IncentiveStill Need to Know How Much Time a Job Should Take (Standard Time)

Standards Are Needed for Estimates

Page 8: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-8

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Ergonomics

Medical, Psychological & Engineering Human / Machine / Operation Interface Repetitive Motion Injury Legal and Moral Issue Financial Issue

Injury Prevention Costs Less than Injuries

Page 9: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-9

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Time Study

Founder and PioneersFrederick W. TaylorFrank & Lillian Gilbreth

Movie “Cheaper By the Dozen”

Composed of 2 PartsAnalyze and Optimize the OperationMeasure the Time and Compute the Standard

Page 10: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-10

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Advantages of Time Study

System for Estimating Costs Justification for Methods Improvement Reduction of Operation Costs Improvement of Engineering Design Information for Managing Productivity

Page 11: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-11

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Procedure for Time Study

1. Methods Analysis and Improvement

2. Record Info. About the Operation

3. Separate Operation into Elements

4. Record Time for Elements

5. Rate Performance

Page 12: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-12

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Procedure for Time Study

6. Convert to Normal Time

7. Determine Allowances

8. Calculate Standard Time

9. Express Standard Time in Appropriate Terms

Page 13: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-13

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Methods Analysis

Is the Job Ready for Timing?Is the Physical Set-up Correct?Is the Layout Efficient?Are the Proper Tools & Equip. Used?Is the Product Produced Correctly?Is the Motion Pattern Optimized?

Page 14: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-14

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Recording of Information

Sketch Process Layout List Elements

Short as Possible (but Time-able)Have Identifiable Start & End PointsSeparate Operator & Machine ElementsSeparate Constant & Variable Elements

Page 15: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-15

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Example of Layout Sketch

Page 16: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-16

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Taking the “Time Study”

StopwatchContinuous vs. “Snap-Back” Methods

Performance RatingTrained ObserverSubjective Comparison Observed Operator to Typical Operator Working at Normal Circumstances

Page 17: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-17

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Allowances

Personal Fatigue Delay Together PF&D (in Percent) Convert to Factor

PF&D%

%Fa

100

100Eq 2.2

Page 18: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-18

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Analyzing the Study

Find Average Time for Each Element Multiply by Performance Rating to

Obtain “Normal Time” Multiply by Allowance Factor to Obtain

“Standard Time”

Page 19: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-19

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Time Study Example Part 1

Page 20: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-20

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Time Study Example Part 2

Page 21: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-21

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Time Study Example Part 3

Page 22: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-22

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Work Sampling

Used for General Purposes:Estimating CostsSchedulingLabor RequirementsMonitoring and Managing Performance

Statistical Technique

Page 23: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-23

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Compared to Time Study

Multiple Workers / Machines Study Large Area Can Handle Long Cycle Times Less Study Time Required (Lower Cost) Less Disruptive of Work Reduces Performance Issues

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Ch 2-24

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

About Work Sampling

Determines Proportion of Time Spent on Predetermined Activities

Based on Probability & StatisticsRandom, Discrete ObservationsSufficient Number of ObservationsRepresentative of Distribution of Population

Page 25: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-25

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Fundamentals Proportion of Time Spent on Activity i

P’i = Ni / N Eq 2.6 Need to Know (Assume or Specify)

How Close Does P’i Need to Be to Pi

How Confident Do We Want to Be That the Sample Interval Encompasses the Actual Value

Need to Determine Z for the Desired Confidence from the Statistics Table

Page 26: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-26

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Normal Curve

Fig. 2.4

Page 27: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-27

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Values for Z 

Area Between Limits (%)

-Z to +Z

Area Outside

Limits (%)68 1.000 32

90 1.645 10

95 1.960 5

99 2.576 1 

Page 28: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-28

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Preliminary Sampling

Uncovers Potential Problems Refines Activity Definitions Helps “Sell” the Sampling Study Provides an Estimate for P’i

Page 29: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-29

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Determining Sample Size

Obtain Z for Desired Confidence Determine Confidence Interval I Estimate Sample Proportion P’i

Compute Ni for Each Activity

Select the Largest Ni as N for the Complete Study

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Ch 2-30

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Calculating Ni

142

''2

I

ppZN ii

i

Eq 2.9

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Ch 2-31

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Conducting the Full Sampling

Spread the N Observations Evenly Over the Study Days

Distribute Each Day’s Observations Randomly through the Day

Determine Rating and PF&D Factors Obtain the Total Units Produced

During the Study (Np)

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Ch 2-32

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Standard Time

Compute the Standard TimeDo Not Include Idle Activities

p

is N

DPFHRNNH

&1/ Eq 2.10

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Ch 2-33

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Considerations for Sampling

Explain and Sell Prior to Starting Appropriately Isolate Studies Use as Large a Sample Size as Practical Observe at Random Times Conduct the Study Over a Long Period

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Ch 2-34

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Other Methods to Determine Time

Labor Hour Reports/Time Cards/Job Tickets

Objective: Time Job SHOULD TakeSpan Time Records OnlyRequires “Adjustment”Collected into Labor-Hour Summary

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Ch 2-35

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Other Methods to Determine Time

Similar ProductsUse Actual Data Decompose Times by Components Reassemble Times for New ProductCan Ratio Actual Times by Ratio of Product Complexities

Page 36: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-36

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Other Methods to Determine Time

Engineering Performance DataMicro-Motion Systems (e.g. MTM)Some Capable of Producing Standards

In-House Systems Experience and Judgment

Page 37: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-37

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Wages

Wage – Money Paid for an Amount of WorkUsually for Direct LaborSometimes for Indirect Labor

Salary – Money Paid for a Given Period of Time

Page 38: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-38

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Fringe Benefits

Additional Costs to Company For Employees Required by Law, Contract, Agreement Can Be Included in Hourly Rates

Or Covered in Overhead

Page 39: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-39

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Determining Wages

Wage Only Gross Hourly Cost

Wages and Fringe Benefits Costs Wage Only Calculation

Based on Time in Attendance

Cdl = Ha x Rh Eq 2.11

Page 40: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-40

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Incentive Wages

Pure Incentive(e.g. Working on Commission)

Cdl = NpRp Eq 2.12

Guaranteed Wage Plus Incentive

Cdl = HaRh + Rh(HsNp – Ha) Eq 2.13

Minimum Cdl = HaRh

Page 41: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-41

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Efficiency

Ratio of Standard Hours Produced to Actual Hours Worked

Measure of Labor Efficiency or Productivity

100a

sp H

HNE Eq 2.14

Page 42: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-42

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Gross Hourly Cost Wages Plus Fringe Benefits Costs Detailed Calculations Required

By Engineering Or (Preferably) Accounting

Fringe Costs Include:Legally Required Employee CostsContractual CostsVoluntary Program CostsCosts for Time Paid but Not Worked

Page 43: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-43

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Legally Required Costs

Social Security Employer’s Contribution7.65% of First $87,000 (as of 2003)

MedicareEmployer’s Contribution1.45% of All Wages Paid

Click for Current Rates

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Ch 2-44

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

More Legal Requirements Worker’s Compensation

Income for Worker Who Cannot Work Due to Injury on the Job

Unemployment InsurancePays Workers Laid Off Through No Fault of Their Own

Non-Exempt Time-and-a-Half PayOver 8 Hours/Day and/or 40 Hours/Week

Page 45: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-45

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Other Fringe Costs

Supplemental Medical InsuranceAll or a Portion of the PremiumsCan Be Around $500/Month ($2.89/Hr)

Life Insurance Premiums Disability Insurance Premiums Supplemental Pension

Page 46: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-46

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Pay for Time Not Worked

Vacation, Holidays, Sick PayAmount of Pay for this Time Is Apportioned Over Total Hours in

the Work YearAdded to Wage Rate

Page 47: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-47

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Joint Labor Costs

More Than One Product Produced By Common Labor

Common Production Up to a Split Point

Common Labor Costs Need to Be Apportioned to the Different Products

Page 48: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-48

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

(De)Jointing Labor Costs

Determine a Common Metric Find a Proportional Relationship for the

Products Apply the Same Proportions to the Costs Market Effects/Strategy Can Distort

Some Products Subsidize OthersPrice Is Not Proportional to Cost

Page 49: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-49

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Learning

First Units Produced Take Longer Familiarization with the Job Reduces

Time Predictable Covered in Chapters 6 & 8

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Ch 2-50

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Learning

Page 51: Ch 2-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 2-51

© 2004 Pearson Education, Inc.Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458Ostwald and McLaren / Cost Analysis and Estimating for Engineering and Management

Summary Definitions Relative to Labor Costs How to Determine Time for the Job

Time StudyWork SamplingOther

Finding the Labor Cost RateWages, Fringe Benefits, Gross Hourly Cost


Introduction to Hospitality, Fourth Edition John Walker ©2006 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Chapter 7 The.

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Ch 4-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 4-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Electric Motors, Generators, and Controls 08 © 2013 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Hybrid and Alternative.

Electric Motors, Generators, and Controls 08 © 2013 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Hybrid and Alternative.

Copyright ©2008 by Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Medical Terminology, 6e By Jane Rice Medical Terminology.

Copyright ©2008 by Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Medical Terminology, 6e By Jane Rice Medical Terminology.

Fuel Cells and Advanced Technologies 29 © 2013 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Advanced Automotive.

Fuel Cells and Advanced Technologies 29 © 2013 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Advanced Automotive.

Chapter 3 Jails ©2008 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Corrections: An Introduction, 2/e Seiter.

Chapter 3 Jails ©2008 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Corrections: An Introduction, 2/e Seiter.

Ch 11-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Ch 11-1 © 2004 Pearson Education, Inc. Pearson Prentice Hall, Pearson Education, Upper Saddle River, NJ 07458 Ostwald and McLaren / Cost Analysis and Estimating.

Cranking System 9 © 2013 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Advanced Automotive Electricity and Electronics.

Cranking System 9 © 2013 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Advanced Automotive Electricity and Electronics.