Posts Tagged ‘obsorption’

Fixed and Variable Costs

There are two main types of costs – fixed and variable.  If something is being manufactured, it consists of both fixed and variable costs.  Fixed costs are those that do not change based on a quantity.  This means the cost is fixed if you produce 1 or 1000 pieces.  Some of these costs would be…

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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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Purpose of Cost Estimating

There are numerous purposes behind cost estimating, including the following: 1. A manufacturer can determine if the project or product is cost-effective to the manufacturer prior to the manufacturing process. 2. There are various alternatives to manufacturing and cost estimating can determine the economic feasibility of manufacturing the project or product by different methods 3.…

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Machine Shop Rates Part 2

Welcome to the MIE Solutions Job Shop Estimating  blog.   Fabrication software as in sheet metal software and manufacturing software deals with shop rates extensively for costing. There are basically 3 ways to calculate overhead absorption rates which is used to provide your shop sell rate during quoting and estimating. Company Overhead Absorption Rate Percentage…

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Machine Shop Rates Part 1

Welcome to the MIE Solutions Job Shop Estimating  blog. MIE Solutions ERP system provides a comprehensive job shop software to deal with the many problems issues a job shop encounters.  Estimating has become a critical factor in many job shops in order to determine the best price for custom and made to order manufactured parts.…

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Calculating Shop Rates Using The Income Statement

We are going to spend the next few posts reviewing what an income sheet is and how the income sheet will help you determine you shop rates. From Wikipedia the definition of income statement is Income statement, also called profit and loss statement (P&L) and Statement of Operations, is a company’s financial statement that indicates how the revenue…

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