Q&A for How to Do a Cost Analysis

Obtain complete cost estimates. Obtain complete benefit estimates. Choose an appropriate Cost Benefit Analysis (CBA) algorithm to analyze the cost and benefit streams. Compute estimated costs and benefits schedule over time to determine the payback period. Make recommendations, and set next steps as required.

List setup and running costs: analysis, implementation, capital investment, time, consumables, etc. List benefits: time saved, improved attendance, improved results. Put a monetary value to each cost and benefit. Capital and running costs. Labor costs need to include the person's pay rate, taxes and overheads in employing them. Costing intangible benefits is much harder and will depend on the system you are working in. For a school, increased attendance increases pass rates that may carry direct funding or may need to have a perceived value attached. In business, improving attendance may negate the need to pay for cover or may increase productivity and profitability.

List alternatives. List your stakeholders. Measure all cost/benefit elements. Predict the outcome of cost and benefits over relevant time period. Convert all costs and benefits into a common currency. Calculate the net present value of your project options.

Consideration should be based on work order of patient, energy per unit, time of procedure, duration of procedure, etc., so it would depend on the procedure required.

Develop a flow chart for how a product is made. Then, follow through direct, indirect and overhead costs.

You can calculate your costs by gathering all of your financial records and information so you can make a reliable estimate. Add up the salaries, supplies, materials, and other costs to find the total direct costs. Then, factor in indirect costs that are specific to the program your analyzing. If you're able to calculate depreciation of your assets, be sure to include that as well, as well as any hidden costs you anticipate. Use as much data as you can to help make an accurate projection.

A cost analysis is an evaluation that focuses on the costs of implementing a program without regard to the ultimate outcome. It's a useful tool to help you determine whether a project is suitable or feasible before you pursue it.

A cost analysis tool is another name for a cost analysis, which is a process that a company or organization can use to analyze decisions or potential projects to determine its value before they pursue it. The tool is built by identifying the benefits of a potential project, as well as its costs to determine its feasibility.