Academic Master

Human Resource And Management

Cost Analysis

Costing is an important tool for any organization. For a person to start and run a business, estimation of all the cost should be provided to allow projection of sales and revenue.

The concern here is a business whose activities are to sell and repair mobile phones and accessories. Since the business performance is attractive and the need for expansion developed, the business may venture to mobile phones and accessories. The business requires initial outlay whose purpose is to facilitate the expansion and ensure the business is up and running. The following is the proposed runway of activities in the new extension of the business. All the relevant projections are inclusive.

Item Amount in $ Amount in $
Sales 1000 units each at 400 dollars. Total value 400,000 dollars
Cost of new equipment.

  • Cost of the machine used for drying phones in repair
  • Heating machine
  • Shelves
  • Display racks
60,000 dollars

20,000 dollars



Cost of personnel involved

  • Number of days worked in a month, 30
  • Salary per month per employee 1200dollars
  • Number of employees is 20
  • Hours worked per day, 8hours
  • The CEO’s salary will be 3000 dollars
1200 dollars each* 20 people working in shifts

The total cost is 24,000 dollars plus3000 dollars for the CEO which is 27,000 dollars

Cost of overheads

  • Cost of support staff is 5000 dollars
  • Cost of supplies is 10,000 dollars
  • Cost of company vehicles 5000 dollars
  • Cost of promotions 5000dollars
The total cost will be an amount of 25,000 dollars
Cost of materials involved

  • Fixtures and fittings
  • Phone glasses
  • Repair kits
  • Accessories
The total is 80,000 dollars
Total cost 237,000 dollars
Profit 163,000dollars

The proposal above reflects on the mobile phone product for a client who wants to use it for resale purpose.the client is in the business of buying and selling for profit purpose.



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