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Real-Life Activities

Real-Life Math -- Solution

Labor costs

Animators = 2 x ($30 x 40 x 12 weeks) = $28,800
Programmers = 2 x ($50 x 40 x 16 weeks) = $64,000
Sound person = 1 x ($50 x 40 x 8 weeks) = $16,000
Writers = 2 x ($35 x 40 x 8 weeks) = $22,400
Interns = 4 x ($7 x 50 x 16 weeks) = $22,400
Subtotal = $153,600

Non-labor costs

Overhead = 6 x $3,000 = $18,000
Phone costs = $1.15 x 60 minutes = $69
Mail = $50
CD-ROMs = 30 x $7.50 = $225
Testing lab = $20 x 40 x 3 weeks = $2,400
Subtotal = $20,744

Labor + Non-labor = $153,600 + $20, 744 = $174,344

You tell your boss the estimated cost of production for the CD-ROM will be $174,344.