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Pearson Nationals Engineering Unit 36: Business Operations in Engineering

Pearson Nationals
Engineering
Unit 36: Business Operations in Engineering.
Be able to apply costing techniques to determine the cost effectiveness of an engineering activity
Assignment Brief Number: 3 Issue 1





Centre No. 16835












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BTEC Assignment Brief

Qualification Pearson BTEC Level 3 National Extended Diploma in Manufacturing Engineering
Unit number and title Unit 36: Business Operations in Engineering

Learning aim(s) (For NQF only) Be able to apply costing techniques to determine the cost effectiveness
of an engineering activity
Assignment title Assessing the Cost and Viability of an Engineering Activity
Assessor Raymond Begah/Chris Whiting
Issue date 3/2/21
Hand in deadline 17/2/21




Vocational Scenario or Context You are working as a final year engineering apprentice with a large engineering organisation that operates within the electrical and electronic/manufacturing/mechanical/aeronautical/mechatronic/computing sectors. Your manager has asked you to investigative to prepare a presentation activity involving calculation and supported by reflective writing and, where appropriate, verbal presentation
































2
BTEC Assignment Brief v1.0
BTEC Internal Assessment QDAM January 2015


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To do this:
Task1.
In a word-processed report explain how to construct a break-even chart (see Appendix 1) Make a break-even chart using the Break-even Data.
The chart that you produce can also be used for a make or buy decision. Explain how a value tree can work.

.
Task Two.
Demonstrate how the cost effectiveness of an engineering activity could be used.
Think about how a costing process could be used within the company you are employed by.
.
Task three
Construct a graph on graph paper that will give you the viability of two milling machines. Machine A is a manual Mill,
Machine B is a CNC mill.
From the data below calculate the number of units where the cost of each unit match.
Machine A
Setting time 10 Mins. Material cost £1.00 per unit. Run time per unit 10 mins. Setters wage £60 per hour. Operators wage £30 per hour.

Machine B.
Setting time 100 mins. Material cost £1.00 per unit. Run time per unit 1 min.
Setters wage per hour. £60. Operators wage per hour £30

Use the vertical axis to represent cost in increments of £20. (£20 to £400) Use the horizontal axis for quantity of units. (10 to 150).
You can generate a graph on the computer or draw it manually and photograph the end result and attach the file to your submitted work.
Checklist of evidence required

Criteria covered by this task:
Unit/Criteria
reference To achieve the criteria you must show that you are able to:
M3 Demonstrate how the cost effectiveness of an engineering activity could be improved.


P7 Carry out costing techniques to determine the cost effectiveness of an engineering activity.
P8 Carry out costing techniques to reach a make-or-buy decision for a given
product.

3
BTEC Assignment Brief v1.0
BTEC Internal Assessment QDAM January 2015


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Appendix A
Break even Data

Cost volume profit analysis (also called break-even Analysis) is an extremely useful tool for managers because of its simplicity and because of its focus on essential business factors.

This material will cover the development of the break-even chart, the use of profit graphs (with illustrations of how cost and price changes impact profits), and a discussion of how you can develop a spreadsheet to generate profit graphs and compute break-even points.

Finally, the last section looks at how managers can use CVP to evaluate things like price changes and changes in marketing. (promotion expenditures).

The following graphs illustrate how one builds a break-even chart. This company has annual fixed costs of $40, a unit selling price of $10, and a unit variable cost of $6. Since it earns $4 from each unit that it sells for $10, the company has a margin percentage of $40% of sales.


First one draws the fixed cost line on a graph. A flat line at $40 level represents fixed costs.















4
BTEC Assignment Brief v1.0
BTEC Internal Assessment QDAM January 2015


This study source was downloaded by 100000808565474 from CourseHero.com on 06-22-2021 12:38:49 GMT -05:00


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The quantitative formula for break-even is finding the total revenue and total costs


Changes in break-even and target profit and revenue (HL)
- Break-even point can be changed through the cost of the product, the price of the product, or any significant change in the environment.


Analyse the assumptions and limitations of break-even analysis. (HL)
- The Break-even analysis has some limitations:

• Assumes that all functions are linear
o As price changes the demand for the product is likely to change so functions in reality should not be linear
• Hard to include semi-variable costs
o Break-even analysis uses variable costs only and semi-variable costs are harder to categorize
• Difficult to analyse for multi-product firms
o Multiple products will cause break-even analysis to be to complex
o One product may have a loss while another may have a profit
o One firm's products may compete with each other
• Any change requires a new analysis


5
BTEC Assignment Brief v1.0
BTEC Internal Assessment QDAM January 2015


This study source was downloaded by 100000808565474 from CourseHero.com on 06-22-2021 12:38:49 GMT -05:00


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o In reality the environment is constantly changing and thus, making this unreliable subject to error

























































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BTEC Assignment Brief v1.0
BTEC Internal Assessment QDAM January 2015


This study source was downloaded by 100000808565474 from CourseHero.com on 06-22-2021 12:38:49 GMT -05:00


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7
BTEC Assignment Brief v1.0
BTEC Internal Assessment QDAM January 2015


This study source was downloaded by 100000808565474 from CourseHero.com on 06-22-2021 12:38:49 GMT -05:00


https://www.coursehero.com/file/80550748/Unit-36-assign-3-Jandocx/



























































8
BTEC Assignment Brief v1.0
BTEC Internal Assessment QDAM January 2015


This study source was downloaded by 100000808565474 from CourseHero.com on 06-22-2021 12:38:49 GMT -05:00


https://www.coursehero.com/file/80550748/Unit-36-assign-3-Jandocx/

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