4.2.

1 Material cost

Materials cost consists of direct material cost and indirect material cost. The cost of material and

the total manufacturing cost. Make up the direct material cost while the cost of material used

which is not part of the component being produced e.g. tools, oil make up the indirect cost.

ASSET DETAILS

TABLE 10

S/N COMPONENT DESCRIPTION QTY DIMENSION(MM) AMOUNT

1 Hollow pipe Hand lever 1 125x 350 250
2 Angle bar Frame 1 25 x 430 2500
3 Bolt and nut Fastener 4 M17 100
4 Bolt and nut Fastener 4 M19 80
5 Sheet metal Tank 1 94 x 200 500
6 Hacksaw Cutting metal 1 Standardize 150
Blade
7 Electrode Welding 30 Gauge 12 3mm 200
8 Grinding stone finishing 1 Standardize 500
9 Solid shaft Machining 1 50 x 500 1500
pressurized
chamber
suction pipe
10 Flat bar Frame base 280 x 280 200
11 Nozzle pipe Injector 60 200
connector
12 Fairly used Pumping diesel 1 7,000
injector pump
13 New pressure 1 7000
gauge
14 Injectors For car testing 2 5000
15 Diesel oil Fluid for testing 8 liters 500
16 Paints For finishing 1 liters 400
TOTAL 26,080
4.2.2 Labour cost

It is mainly in form of wages to fabricate this; the service of one technician is required the

machine is expected to be complete under 2 weeks considering 5 days in a week (number of

baring days in a week) and 8 hours per day.

=5 x2 =10 days

But the number of working hours per day is 8 hours. Therefore total number of hours in 2 weeks

=10 x8 =80 hours

Since a technician receive N500 per day

Therefore the amount per hour =500/8 = 62.5/hour

Total labour cost = total number of hour and total amount.

=80 x 62.5 = N5000.00

4.3.3 Overhead cost

The overhead cost involves the cost of running the workshop transportation, water,

building e t c. to cater for the machine used and other running expenses.

In the construction of this machine the overhead cost involves the extra cost of

completing the construction of the nozzle tester.

The cost involves the following;

1 Transportation = N3000.00
2 miscellaneous = N2000.00
Total overhead cost = N5000
Production cost =labour cost + overhead cost + material cost
5000 + 5000 + 26080 = N36080