From the course: Accounting Foundations: Cost Estimating
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The data collection process
From the course: Accounting Foundations: Cost Estimating
The data collection process
- At my first job, I was assigned to cost a photocopier. I found one and gave my boss the cost of the copier, paper and toner. You know, all of that good stuff. She replied, "Good start, but what about the other stuff?" There was more? Who knew? Like I was, if you're new to cost estimating, chances are you only account and cost for the items you need immediately. I call this a shopping list, not a cost estimate. If you want to build a robust estimate, you'll need to follow a specific four step process. First, an analyst will get an understanding for the task or item they're costing. Like my boss said about costing for the copier, it was a good start, but I failed to see how to staff at an engineering company by the way, would you use this copier for things like large drawings. I hadn't realized the copier was used for other tasks. Before costing anything, you need to fully understand what you're estimating. Don't know…
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