Create bottom-up budget estimate

Assignment Help Operation Management

Reference no: EM132084760

Bob is a homeowner who wants to convert a spare bedroom into a home office. Shirley agrees to remodel the room for Bob. The bedroom currently has old carpet, a clothes closet, old paint, and no window coverings. Bob wants to install laminate floors, paint the walls, install a closet organizer, install window blinds, and furnish the room with office furniture. Shirley came over to the house and provided a free consultation. She determined that the room will need 170 ft2 of flooring (the room is approximately 12 feet x 13 feet), 2 gallons of wall primer, 2 gallons of wall paint, and one gallon of ceiling paint. The window is 36 inches wide and 48 inches tall. The closet is 6 feet wide and 2.5 feet deep. Working together, Bob and Shirley agreed that the office needs a 60 inch computer hutch with a chair, a 48 inch library table, two book cases that are approximately 72” high, and a 3-drawer filing cabinet. Bob decided to buy oak furniture, and he selected wooden blinds for the window. Shirley charges $50 per hour for her labor. Shirley will order the furniture. She will also shop for all of the materials and supplies for the renovations and bring them to the home. She will perform all labor except for delivery and setup of the furniture. The furniture supplier will charge a $250 fee for this service. Shirley charges overhead for all other direct labor by using a multiplier of 1.10. She also uses a 1.10 markup for all materials and supplies, except for the furniture. Assume that Shirley will dispose of the carpet, padding, and other waste materials, which will incur a $75 disposal fee (no markup). Assume that Shirley has all the necessary tools and equipment. Your assignment is to do the following:

a. Create a bill of materials and assign each material and supply to the appropriate work package.

b. Select materials and supplies from retailers on the web and determine prices.

c. Create a bottom-up budget estimate (see the example below for help with formatting).

d. Create an estimate sheet similar to the one shown in Figure 8.3, page 265. You do not need to use artistic logos or pictures; your goal is to make something with a similar structure and similar information.

Reference no: EM132084760

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