Bill Of Materials

Classification Of Costs – Fixed and Variable Costs

There are many facets of costing and breaking costing into these four categories helps in understanding Fixed and Variable Costs Direct and Indirect Costs Costs are generally classified as to whether or not they vary with the quantity of parts being manufactured.  Many times this can be described as a Setup Cost because it does…

Read More

Engineer To Order Material Costs

Now that we have been investigating many of the details of material costs in quotations, we will now take a look at the mathematical calculations required. Engineer To Order Material Costs Step 1)  Determine the quantity of parts required.   This is the number of parts required to make the end product.  In many situations…

Read More

Material In Cost Estimates Weight Calculation

Material costs in job estimates can come in a variety of ways.   When you are estimating the cost to manufacture a product and the product is made out of either plate material, sheets, tubing, etc there are a few calculation methods that may be required. Here is a list of 7 calculation methods which…

Read More

Material Weight

Material Weight In order to estimate the cost of material it is essential that you know the weight of different material gauges and types of material.   Below you will find a list of some common weights dealing with the metal industry and metal fabrication.  One of the key factors is knowing the weight factor…

Read More

Material Estimating

Material estimating can be simple to complex depending on the particular job you are estimating.   Raw material is a commodity which could include metal sheets, wood, bars, plastic, plates, block of metal, etc.  These items are purchased from a supplier and are usually priced at a per unit weight price. A few examples 1.…

Read More

Material Cost Calculation

Material cost calculation potentially involves a lot of information.  In my previous blog I mentioned many of the data points involved in the material cost calculation including Parts Size, Blank Size, Stock Size, Safety Stock Size, and others.  One of the reasons you need the part size is raw material is usually a commodity.  The commodity is usually priced in…

Read More

Raw Material Sheets Cost Calculation

Raw material sheets include plates, sheets, plywood and any other commodity item which is x,y and thickness dimensional.  Raw material is usually purchased by weight and is a commodity.  I’m going to define commodities as items where their price fluctuates constantly based on market forces.  Some commodities you have heard of is soybeans, wheat, oil,…

Read More

Indirect Material Costs

Indirect material costs are those that are not directly added into the product. There are many times where materials are required to manufacture a part but are not put directly into the product.  Examples of this may include oils, lubricants for machines, sandpaper, molds, and castings. There are some situations where the molds and castings…

Read More

Material Cost

Material cost is a big subject and will be handled in multiple blog entries.  Material costs are costs that go directly into producing the desired product.  Material costs can be divided into both direct and indirect material costs.  We will focus on direct costs because they directly affect the product’s price. Material can also be…

Read More

Manufacturing Costs

Manufacturing costs consist of multiple elements which arrive at the full cost.  When estimating a product to be manufactured the entire costs are distributed between the following elements. Material Costs – This includes both raw materials, which is reshaped, formed, etc to produce the item and purchased prefabricated items, like nuts, bolts, screws.  The raw…

Read More