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Real-Life Math

You've just finished writing the initial script for a car and motorcycle encyclopedia CD-ROM. Before beginning the hectic process of production, you've got to put together a budget detailing how much it's going to cost to produce.

This is your initial budget, so the figures will most likely change as you think of more people or materials you will need. Later during the project you will revise your budget. But for now, your boss wants to see how much you estimate the project will cost.

Using the list below, tell your boss how much you estimate this CD-ROM is going to cost to produce.

Labor costs

  1. 2 animators
    Rate of pay (each): $30/hour
    They will each work 40 hours per week for 12 weeks
  2. 2 programmers
    Rate of pay (each): $50/hour
    They will work 40 hours per week for 16 weeks
  3. 1 sound person
    Rate of pay: $50/hour
    She will work for 40 hours per week for 8 weeks
  4. 2 writers
    Rate of pay (each): $35/hour
    They will work 40 hours per week for 8 weeks
  5. 4 interns
    Rate of pay (each): $7 hour
    They will work 50 hours per week for 16 weeks

Non-labor costs

  1. Overhead: office space rental, office supplies, computer space. Calculate by estimating $3,000 for each writer, animator and programmer
  2. Long distance phone calls to get license: $1.15 per minute for 1 hour
  3. Shipping and handling costs: $50
  4. Blank CD-ROMs for testing purposes: 30 at $7.50 each
  5. Testing lab costs: $20 per hour, 40 hours per week for 3 weeks

Total the non-labor and labor costs and tell your boss how much your CD-ROM will cost to make.

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OCAP believes that financial literacy and understanding the financial aid process are critical aspects of college planning and student success. OCAP staff who work with students, parents, educators and community partners in the areas of personal finance education, state and federal financial aid, and student loan management do not provide financial, investment, legal, and/or tax advice. This website and all information provided is for general educational purposes only, and is not intended to be construed as financial, investment, legal, and/or tax advice.