Thank you Ian for the clear explanation, really good video - The material cost is $768.6 = (732*1.05) - The formula for Labor cost in the spreadsheet is multiplying setup and run time cost (it should be added), that's why the cost of 45 mins is higher than 1 hour. (=($C17/60)*($E17)+($D17/60*$E17))
Just a quick question on this set up. looking at the first line of the second graph: If it takes 10 minutes to set up and 35 minutes to do that is 45 minutes total at $20 an hour which wouldn't that be $15 to charge, I don't know how you got $38.89?
Hi Ian, I enjoyed watching your video above. Looking at LAB RATE - Cutting, why did you multiply Setup by Run instead of adding the two columns for the cost per hour ? It does not initially make sense to me.
My calcs show... 1. Total Material = $732 + 5% = $768.60...? 2. Labour times - how does 45 minutes of labour - (set up of 10 mins and run time of 35 = total 45 mins...) at $20 per hour equal $38.89...? Should be $15.00...???
I’m in the same boat I’m so confused how he got $38.89 when it should be $15.00 for 45 mins of work at $20.00 an hour. I’m not great at math but his calculations are confusing me even more.
Hi Ian !, I am many years late. lol, it's 2021. If you're still around I would like it if you would answer this question for me. Just say I made different sizes of 1 said product. Should I do this for each category?
Hello Bilal = I will be doing a video soon about how to determine your overhead rate. In this video I may have just taken 30% as an example of overhead rate - But I will explain how to calculate overhead rate in the future.
@@Driveyoursuccess Mr.Ian, thanks for your reply. I currently own a metal false ceiling manufacturing business and we have over 20 products with each product having several sizes in thickness. I'm having a very hard time calculating how much I should add for overhead charges after finding my cost to produce this material. This cost excludes labor charges, electricity, maintenance of machines. You're video is one of the best examples I found online. You seem like you know what you're talking about. And I would appreciate your help. Do you provide a service for advising/helping others analyze their business and determine how to reduce costs, overheads, and how to make sure they're pricing properly? Would love if we could discuss in detail. Thanks
I use 2 types of overhead (ME Manufacturing Expenses and AE Administration expenses) which are using 730* Account codes and 770* Account codes. So I have a manufacturing company welding machining painting, Every Workcenter has multiple machines and multilabour plus ME on it. AE equals Administration Costs / Direct Costs( Mat+Labour+ME)
@@Driveyoursuccesshelo Mr. Ian, thanks for the tutorial. I have some big question similary with Mr. Bilal, about how are the ways to determine the completion rate for direct labor & factory overhead. Would you please send the links to calculate & undertanding about completion rate? Regards
Sir by the increment in factory overhead does inventory turn over ratio increase??? In one of the case it is increasing can you explain me how it is increasing?
Mr. Ian Johnson. Really appreciate your effort! Thanks a lot. Setup Cost and Run Cost should be added or multiplied? (In your example sheet, you have multiplied)
Thank you Ian for the clear explanation, really good video
- The material cost is $768.6 = (732*1.05)
- The formula for Labor cost in the spreadsheet is multiplying setup and run time cost (it should be added), that's why the cost of 45 mins is higher than 1 hour. (=($C17/60)*($E17)+($D17/60*$E17))
Great Point Andres. Take care
Just finished watching the video and setting up the spreadsheet. I noticed these points as well. Thanks for clarifying!
Just a quick question on this set up. looking at the first line of the second graph: If it takes 10 minutes to set up and 35 minutes to do that is 45 minutes total at $20 an hour which wouldn't that be $15 to charge, I don't know how you got $38.89?
Something not adding up huh
Hi Ian, I enjoyed watching your video above. Looking at LAB RATE - Cutting, why did you multiply Setup by Run instead of adding the two columns for the cost per hour ? It does not initially make sense to me.
Where is the material shipping cost and duty/tariff from the supplier to your factory?
Thank You Sir, very usefull for me. Simple and very clear Manufacturer Cost Calculations.
My calcs show...
1. Total Material = $732 + 5% = $768.60...?
2. Labour times - how does 45 minutes of labour - (set up of 10 mins and run time of 35 = total 45 mins...) at $20 per hour equal $38.89...? Should be $15.00...???
It is incorrect
I’m in the same boat I’m so confused how he got $38.89 when it should be $15.00 for 45 mins of work at $20.00 an hour. I’m not great at math but his calculations are confusing me even more.
Great video and easy to understand!
Hi Ian !, I am many years late. lol, it's 2021. If you're still around I would like it if you would answer this question for me. Just say I made different sizes of 1 said product. Should I do this for each category?
Hello Mr. Ian, my big question is and problem at the moment is how did you determine that overheads are 30%?
Hello Bilal = I will be doing a video soon about how to determine your overhead rate. In this video I may have just taken 30% as an example of overhead rate - But I will explain how to calculate overhead rate in the future.
@@Driveyoursuccess Mr.Ian, thanks for your reply. I currently own a metal false ceiling manufacturing business and we have over 20 products with each product having several sizes in thickness. I'm having a very hard time calculating how much I should add for overhead charges after finding my cost to produce this material. This cost excludes labor charges, electricity, maintenance of machines. You're video is one of the best examples I found online. You seem like you know what you're talking about. And I would appreciate your help. Do you provide a service for advising/helping others analyze their business and determine how to reduce costs, overheads, and how to make sure they're pricing properly? Would love if we could discuss in detail.
Thanks
I use 2 types of overhead (ME Manufacturing Expenses and AE Administration expenses) which are using 730* Account codes and 770* Account codes. So I have a manufacturing company welding machining painting, Every Workcenter has multiple machines and multilabour plus ME on it. AE equals Administration Costs / Direct Costs( Mat+Labour+ME)
I have same big question with you Mr. Bilal
@@Driveyoursuccesshelo Mr. Ian, thanks for the tutorial.
I have some big question similary with Mr. Bilal, about how are the ways to determine the completion rate for direct labor & factory overhead. Would you please send the links to calculate & undertanding about completion rate?
Regards
Sir by the increment in factory overhead does inventory turn over ratio increase???
In one of the case it is increasing can you explain me how it is increasing?
You figure it out yet?
Mr. Ian Johnson. Really appreciate your effort! Thanks a lot.
Setup Cost and Run Cost should be added or multiplied?
(In your example sheet, you have multiplied)
Great video!!!
Hello sir, I just started my home made production factory last week. How can I show you my cost.
How your business making out
Very interesting!
Hi, Nice explanation. But am confused about labor cost calculation. Can please elaborate?
Why did you use 30% of material and labor? Why not use a higher or lower percentage
Thank you a great work
I wish my production would be this simple...
Sir how it is 0.75?? Where as 25÷100=2.5
very useful
Thank you Ali.