Defining Costs

[Leo Graywacz]

I just started to get into the define costs area in the program. In its present form it is not compatible with the way I do my cost estimating. My standard way to price things is by the lineal inch and per component. I usually start with $15.50/ lineal inch for cabinets then I add in a standard dollar cost for doors, drawers and other items. Is there a way to define costs to cabinets this way? Or am I at the mercy of the constraints of the program and needing to figure out a way to make them compatible with my way of estimating? Is there a way to input formulas into the costing instead of specific time allotments which include the sizes of the cabinets? When you place a cost price on the seed cabinet and change its size does the program take that into consideration? Thanks.

Leo

[DanEpps]

Leo

You can use the Historical Ratio Cost Calculations instead of Labor Based. This says that labor and overhead are historically x% of materials.

The easiest way to do this is to take all materials costs for a specific period of time and all labor and overhead costs for the same period. Divide total labor by total materials and put the result in Labor Ratio to material. Do the same for overhead. You can also enter a fixed dollar amount of markup for labor and overhead.

You can also use the fixed markups along with fixed profits to add to the cost of materials.

As for the cost changing with size changes; yes, to a degree. The material costs are obviously changed because more (or less) materials are required. The only way to change labor is to change the amount of time required to build the cabinet. This has to be done on each cabinet.

Remember, these are ESTIMATES, not actual costs. As with any method the actual cost can only be determined after the fact.

It will take some fine tuning but you can accomplish what you want.

[Kerry Fullington]

Leo,
I define my costs by breaking each cabinet into it's individual components and assign labor costs to every square inch of those materials or by the each (for things such as hinges and slides). I created a spread sheet to do this with and I simply take the material and component list from eCabinets and enter the information into the spread sheet and then put the labor costs calculated by the spread sheet into eCabinets as a fixed markup.
I have always felt that the cost calculations used in eCabinets were not adequate but maybe that is the reason. Each of us has their own way of calculating labor costs and it would be difficult to please all of us.
Kerry

[DanEpps]

I have seen the spreadsheet Kerry uses and it is good. Like everything else though, it requires effort to make it accurate. Kerry and I have discussed creating a Windows program to simplify cost calculations when we both have time to work on it.

Kerry's assessment of eCabinets costing is correct. The question though is, do you want great cabinet design software or accounting software? I do think the costing methods could be simplified somewhat but the data required to arrive at a cost, thus selling price, remain the same. You must know the cost of materials, labor and overhead. You also must know how much of each it takes to build a particular cabinet. There is no way around this requirement no matter what you selling price method is.

Think of it this way: When you go to the grocery, items are priced by the \"each\". Every item has a size, be it weight or volume. Item A sells for $1.00 in size 1 and $1.50 in size 2. How do you know which is the better buy (without taking a calculator shopping with you)? Simple, you look at the unit price on the shelf which breaks the price down to a cost per ounce or some unit.

It is exactly the same for pricing your cabinets. The difference is that you are pricing by the unit (linear inch) instead of by the each (job). The cost and selling price remain the same, you are just breaking the price down to the lowest common denominator.

It would be difficult indeed to satisfy everyone's pricing methods. That is the reason eCabinets relies on the cost of materials, labor and overhead to calculate total cost and selling price.

[Leo Graywacz]

I understand that it is only to be used as an estimating process. I spent some time trying to define my terms into an hourly configuration. I set up a ratio of milling:assy:finish seeing as they are closely related, maybe not exact but they are based on a somewhat sized based relationship. Only the milling is less sized based than the assy and finishing. I came up with a ratio of 2 : 3.5 : 1.75, we'll see how this works. I took my standard way of calculating cabinets to find out the price that I charged and the played with the numbers until I came up with the approx pricing I charge. Shop and install times are set at 1 hr each, which is probably not very accurate and is regressive as the cabinets get smaller.

I am surprised that there isn't a lineal ft based calculation seeing as that is the way all the board stock is calculated and is a standard when large companies sell cabinets. Maybe in the next major upgrade.

Thanks for the help.

[Mark Barelmann]

Being a newbie, I probably shouldn't even chime in with Dan and Kerry, but...

Couldn't you define a material to be used just for the decks and cost it at say $.65 / sq in (your 15.50 / lin in / 24\" deep) and then set all the other construction material to 0? This would give you $15.50 per lin in, automatically adjusted for length. Then cost the doors, drawers, hardware, etc. I guess though it would mess up your nesting if you're using it.

If there's some other major flaw I'm missing, sorry. ...

Mark

[DanEpps]

Being a newbie, I probably shouldn't even chime in with Dan and Kerry, but...

Why not?

Actually I like that idea. The only problem is that while it will give an accurate selling price, you won't know the cost of producing the cabinet. If this doesn't matter to you then it should work.

The only way to find out is to try it.

[DanEpps]

Being a newbie, I probably shouldn't even chime in with Dan and Kerry, but...

Couldn't you define a material to be used just for the decks and cost it at say $.65 / sq in (your 15.50 / lin in / 24" deep) and then set all the other construction material to 0? This would give you $15.50 per lin in, automatically adjusted for length. Then cost the doors, drawers, hardware, etc. I guess though it would mess up your nesting if you're using it.

If there's some other major flaw I'm missing, sorry. ...

Mark

I just thought of a reason that this won't work--yield. The cost is calculated using the yield percentage. If you haven't nested the job then estimated yield from the material definition is used. If you have nested the job, actual yield is used.

It was a great idea though...keep 'em coming.