Cost sheets

[Robert M. Baltz]

Hi, I am a new eCabinet Systems user and am starting a new custom cabinet shop as well. I am close to completing the shop and am trying to get a handle on the software. I have been working for others for years and am determined to make this business succeed. I need to ask if anyone can help me with some of the basic information the software uses to create cost sheets. I wanted to know what other cabinetmakers figure for their manufacturing costs/profit margin/overhead cost per hr./etc. I would appreciate any help with this matter so I can generate some cost sheets. As I said I worked for others so this was not info I was privy to while being in the shop. Thanks! R. Baltz carolinab@bellsouth.net

[DanEpps]

As you are well aware, prices and costs are highly localized. What is reasonable to a resident of New York or Los Angeles would be laughed at here in Rocky Face GA.

You need to find the prevailing prices for different types of cabinetry in your area. Not the big box stuff, custom cabinets. Most members here in this forum will probably tell you that a \"price per foot\" is nearly impossible to come up with unless you intend to build only a limited catalog of cabinets.

Materials are easy to cost. Labor and overhead are what keeps many accountants employed. How much labor and overhead goes into each cabinet? How much does that labor and overhead cost? How long does it take to build a particular cabinet? What do you want your profit margin to be?

I probably a far too complex model for costing and it would not suit most shops very well. The best cost models are built over time. Without having financial data from past years to compile your costs, the best you can do is an educated guess. OK, not really a guess, but you will have to determine how much it will cost you to operate for your first year in business. This is your operational budget. Then, you have to forecast your projected sales for the first year. This is your income budget. Then, based on the sales forecast, you have to determine how much materials and direct labor will cost. This is your expense budget.

This all sounds very complicated but it really isn't. I will be happy to help you any way I can. Feel free to email me and we can work on this \"offline\" if you would like. Check out my website, http://www.eCabWorld.com. It is new (about three weeks old) and currently doesn't have a lot of content, but will offer information like this in the near future.

Good luck in your new venture.

[Nick M Singer]

Whilst we are on the topic of costing I wondered if there were any plans afoot for inclusion in V5 of a more flexible costing system. Not only allowing one to specify the costs of all ones materials but also to set labour rates by operation accross the board and not per module. By this I mean for example setting a rate for assembly per component or machining per lineal meter or spraying per square meter, etc?

[DanEpps]

Nick

That is what you do, sort of, already in eCabinets. Anything more complex than the current time-based method would, in my opinion, be outside the scope of a custom cabinet design program.

Given the differing levels of difficulty associated with various construction methods, materials, etc., it would be difficult to assign global cost numbers on a basis other than time. That is why the labor and overhead rates are global but the amount of time required for each function are on the individual cabinet.

Keep in mind that this is a cost estimating feature, not a cost accounting feature. The information from your cost accounting system is used to provide an easy method of creating a quote to your customer.

[Nick M Singer]

Hi Dan

Not really, it is just a paradigm shift. Instead of putting in a value that has been calculated externally for each operation it is a matter of setting rates for each operation which apply to each unit. for example a cabinet part regardless of its size would take roughly the same amount of time to cut or screw / dado / dowel to another. we could therefore assign labour values based on time, per operation. The system would then just total up all the parts multiply by the assigned time and monetory rate and voila!! a price! If you were manufacturing a moulding it would be a matter of time per lineal meter for running it through a moulder plus the material cost. I know this is all possible because it all happens like this in Cabinet Vision and allows for a far more comprehensive estimation of a project. The other problem we have is that those of us living in far off lands can not get proper cost estimates because a large part of the material input is inaccurate because we can not use the catalogue prices for doors , moulding and hardware/ fittings. This is an issue that has been raised frequently and I was just curious to know if anything was going to change in this regard

[DanEpps]

You sound as if you use as complex a costing method as I do . I wish there were a means of importing cost data from my cost accounting system into eCabinets or exporting eCabinets data to my cost accounting system, or both. In my case, I think the export functionality would be a better solution.

I think what you and I are both looking for is more of a bill of materials/assembly style of costing that can account for costs on a micro level rather than a macro level.

[Nick M Singer]

Your right there Dan. We do more custom specialised work with a high level of variation. The current eCabs system works fine for a more catalogue type of costing, where one is producing mainly standardised units. Well we can live in hope and wait patiently!