large and small shop practices Flashcards
the cost of producing a project can be broken into direct costs and general expenses what remains after all expenses are accounted for is profit
business cost
an example is the solid lumber consumed when building a project
Direct costs
these are all of the costs necessary to facilitate the construction of the project, but that cannot be tied to specifically to a project
General expenses
This is the amount that is left over after all direct and indirect costs are paid out
Profit
Economic factors
the supply and demand for labour resources has a substantial effect on the overall cost of a project
prices fall = supply goes up, demand goes down
prices rise = supply goes down, demand goes up
Nature of owner and design consultant
the personalities involved may not be conducive to forming an effective project team. the workmanship of the design consultants, as reflected in the quality of the drawings, specs and project administration they provide also has a significant effect on the final cost of a project
for example, some people may be uncommunicative, uncooperative. and generally difficult to deal with, this usually has a negative effect on the project costs
Preliminary Estimates
- conceptual estimates
-cost control estimates
-cost management estimates
Cost management estimates
Cost managements during the design stage of a project includes the consideration of alternative designs and components that require a series of preliminary estimates to be prepared so that informed decisions can be made on what to include in the design. later, when the project is underway, estimates are again utilized this time to provide a budgetary control system that enables the cabinetmaking company to identify production deficiencies, this allows them to take timely action to correct problems and maintain profit margins
Quantity take-off
the items that should be considered in the estimate are:
-your time as a General contractor
-contract costs, such as permits, drawings, engineer’s drawings and other consulting fees
-labour costs (employee wages if applicable)
-EQUIPMENT OR MATERIALS REQUIRED
-waste removal and dumping fees
-sub-trade prices, including labour and materials and deliveries
-items purchased from other companies(buyouts)
-subtotal ( the sum of the above expenses)
-profit, which is usually between 5% and 20%
-taxes, including applicable federal and provincial taxes not already included in the other prices
Examples of overhead
overhead os generally considered to be any material or labour cost that cannot be billed directly to a project
Debt payment
Debts include such things as the rent or lease of machines and vehicles, as well as any mortgage payments on the base building
examples of overhead
utilities
building maintenance and modifications
machinery repair and relocation
office supplies
shop supplies
insurance
payroll
site work overhead
Mid to large-size company
employees 271 people almost one third of whom are not productive workers in the sense that they do not produce any product. their work supports the productive workers in the plant
Small shops
if you work in a small shop, your training will likely be that of a generalists; you will learn a little bit of everything
Large shops
it is more common for large firms to produce specialists
