Chapter 20 Preparing for Your Career 595 Copyright Goodheart-Willcox Co., Inc. To create a realistic budget, you will need to determine the price for which your company will sell your product. Factors that help determine the price include: • A projection of the number of items that will be sold • The cost of making the product • The cost of servicing the product (if you decide to provide service) • Overhead expenses • The expected break-even point STEM STEM Link Link Cost Estimation Math Accurate estimation of costs is essential to creating a realistic budget. If your actual costs are greater than you estimated, your company will go over budget. The list of building materials shown here includes costs for raw materials, labor, and overhead. An example of a cost estimate is shown. Estimated Costs Raw Materials Glass blocks (24 blocks @ $13.43) $322.32 Tile glue 17.67 Grout 12.96 Framing lumber 56.11 Caulk 5.79 Total materials $414.85 Labor 12 hours @ $32/hour 384.00 Overhead Utilities 211.00 Equipment rental 160.45 Total overhead 371.45 Total Cost Total Cost $1170.30 Goodheart-Willcox Publisher Math Activity Estimate the costs for your class business. First, copy the chart below to a separate sheet of paper. Then fill in the chart with your estimates. Be sure to itemize the costs in each category. Item Cost Raw materials (itemize) Labor (estimate the number of hours and multiply by the hourly rate you will pay) Overhead costs (itemize) Goodheart-Willcox Publisher