Cost Estimation

Mini-Case Study: Cost Estimation at Global Green Books Publishing Global Green Books Publishing is continuing to produce customized eBooks as a key new product line for it as a successful printing and publishing company. It has developed a template to help plan job orders. The major customer for these customized eBooks is a local college, who expected these books to be delivered at a low cost, and the company has not always been doing that. The Accounting department in Global Green Books was having difficult tracking the costs for each of the books. Each eBook had a separate job order prepared that listed all the steps that needed to be completed, so that tasks could be assigned to each worker and costs estimated. With the existing job orders, estimates of time required for each task were sometimes not completed until after the work was done, causing problems as workers were supposed to move on to new tasks but were still finishing their previous tasks. Some tasks required specialized equipment or skills, sometimes from other groups within Global Green Books. Along with its template for job orders, Global Green Books wanted to start developing a project estimate for each new eBook project. This cost estimate should capture direct costs and indirect costs. The direct costs for an eBook project include labor costs for those in the company working on the project, materials costs (if any), subcontractor or outside labor, and