ABSTRACT
There are a number of different approaches and tools to use in both the analysis of a completed estimate and in the process of doing the estimate. A new product, being estimated the first time, should be compared to a similar product or some basic product that has been manufactured in the past. In addition, an estimate is usually compared to a previous version, if it exists. Typically, this type of analysis involves comparing two estimates or an estimate and some actual costs. This comparison includes past versus present or future versus actual for all major cost elements. All significant changes, favorable and unfavorable, should be explained. The cost elements used in the comparison are labor, burden, material, scrap, engineering expense, and contingency. Besides the cost elements, unit hours, yielded hours, and yields should be compared.
