Posts Tagged ‘labor costs’

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…

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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…

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Techniques for Cost Estimating

The basic cost estimating techniques involve analyzing all factors that make up a cost estimate. The first technique I would follow is to go through the following steps, systematically, and costing each one out in detail. Once you have gone through the basic steps, you will have all the cost information required for the estimate. 1.…

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Estimating the Costs of Estimates

An interesting situation when creating estimates is determining which estimates to spend time on and which estimates are too costly to put the effort into.  In a tough economy, your company takes on jobs that don’t lead to a reasonable profit, but you will do almost anything to keep your machines busy.  This is a…

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Cost Estimate Types

There are different types of cost estimates including “Rough Approximation” of cost which can be a conceptual design, preliminary design and then a detailed estimate or quote. Rough Approximation The rough approximation is really prepared for informational purposes only.   This type of estimate may not have geometry or even materials but just a rough idea…

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Estimating Software Guide

There are many different type of software estimating package for made to order manufacturing Made to order manufacturing includes any custom job shop type work including sheet metal, machining, wood working, stamping, press work, printing which all require customized quotes.   Quotes include both operation and bill of material.  Below you will find a checklist…

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Introduction To Shop Rates

Labor used to produce products and services purchased by customers. These man-hours are directly attributable to customer activity. Lab A few years ago before computers, excel spreadsheets and calculators most organization used a standard shop rate for any labor that was occuring during a process.   Now that computers can easily calculate figures organizations have…

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