Founders Blog

Material Estimating

By Dave Ferguson | Mar 16, 2011 | 0 Comments

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….

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Material Cost Calculation

By Dave Ferguson | Mar 11, 2011 | 0 Comments

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…

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Raw Material Sheets Cost Calculation

By Dave Ferguson | Mar 5, 2011 | 0 Comments

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,…

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Direct Labor Costs

By Dave Ferguson | Feb 26, 2011 | 0 Comments

Direct labor costs are those costs which are performed during the production of some product.  The product can be any type of item from a machined part, computer and vehicle.  Labor is required to change a raw material into a product that may be sold or given away.  Direct labor is calculated by taking the…

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Indirect Material Costs

By Dave Ferguson | Feb 20, 2011 | 0 Comments

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

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Material Cost

By Dave Ferguson | Feb 17, 2011 | 0 Comments

Material cost is a big subject and will be handled in multiple blog entries.  Material costs are costs that directly go into producing the desired product.  Material costs can be divided into both direct and indirect material costs.  Direct costs are what we will be looking into because those costs are directly in the product….

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Manufacturing Costs

By Dave Ferguson | Feb 16, 2011 | 0 Comments

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 material which is reshaped, formed, etc to produce the item and purchased prefabricated items like nuts, bolts, screws.  Raw material…

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Direct and Indirect Costs

By Dave Ferguson | Feb 12, 2011 | 0 Comments

Fixed and Variable costs can now be broken down into two more cost types.  Direct and Indirect costs classify the costs of parts being manufactured and are critical to calculating shop overhead rates.  Direct costs are those costs that are directly associated with the production of the product.  Indirect costs are those costs which do…

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Fixed and Variable Costs

By Dave Ferguson | Feb 11, 2011 | 0 Comments

There are two main types of cost which are Fixed or Variable costs.  If something is being manufactured it consists of both fixed and variable costs.  Fixed costs are those cost that do not change based on a quantity.  That basically means the cost is fixed if you product 1 or 1000 pieces.  Some of…

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Job Costing Software

By Dave Ferguson | Feb 10, 2011 | 0 Comments

Job Costing has been around for many years to determine the cost of manufacturing a given product.  The process by which the expenses are record is costing.  Job costing software should make the process of recording the transaction simpler and not more difficult and time consuming.  Job costing software is not like cost accounting because it does…

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