Question

List and describe items that should be included when estimating activity costs?

Answer 1

The items that should be included when estimating activity costs are as follows :

a. Travel costs : If the overseas travel is necessary during carrying out the project or activity it must be included which includes the accommodation, airfare cost that will be spend on travel.

b. Facilities costs : It includes cost involved to rent a place if required as some materials required additional storage space, special facilities, hence facility cost includes cost required to rent or build a storage place.

c. Material costs : For the activity some of the materials are required this cost includes estimated cost required to purchase these materials.

d. Equipment costs : To carry out the activity it requires some specific equipment like for example machinery if not available, the cost involved to either loan out or buy is included in equipment cost.

e. Subcontractor and consultants costs : If the activity cannot be performed by the team members, company need to outsource the work to the subcontractors or require to take advice from the consultants.

f. Reserve : This cost includes unexpected expenses that can come during carrying out activity such as machinery breakdown etc which are usually overlooked during planning phase.

g. Labor costs : Labor cost includes the wages, incentives, overtime paid to the workers during the expected duration by calculating the dollar labor rate for each labor.