The authors present the latest principles and techniques for the evaluation of engineering design. The text is suitable for undergraduate or graduate courses in cost estimating in engineering, management and technology settings.

The percent-of-sales method is a frequently encountered simple approach for estimating cost components and profits in projected income statements. The method assumes that all costs are variable, implying that profit margin is constant. Profit margin ratios are also used to estimate profits directly. This may be reasonable in the long run, but some fixed costs are present in the short-run, resulting in forecast errors. I propose a short equation that incorporates the initial profit margin, the sales growth rate, and the ratio of fixed cost to initial sales that renders more accurate profit estimates while preserving the simplicity of the method.

In order to succeed in a construction business you have to be able to mark up the price of your jobs to cover overhead expenses and make a decent profit. The problem is how much to mark it up. You don't want to lose jobs because you charge too much, and you don't want to work for free because you've charged too little. If you know how much to mark up you can apply it to your job costs and arrive at the right sales price for your work. This book gives you the background and the calculations necessary to easily figure the markup that is right for your business. Includes a CD-ROM with forms and checklists for your use.

This book contains material on the use of software, organization strategies in cost estimating, new types of costs, learning curves, and much more. Topics presented include manufacturing costs, standard vs. actual costs, cost in relation to product volume, analysis, types of estimates, cost estimating controls, cost requests from other departments, evaluating supplier quotes, calculating selling prices, and much more.