Question
Does anyone have a formula they use when bidding jobs using CNC equipment?
Forum Responses
Here's the way I do it.
Machine time (how long to run the parts)
+ Program time (how long to program the parts)
+ Spoil board (do I need to make a spoil board or fixture?)
+ Tooling (how much will the tooling cost me?)
+ Packaging (add labor to skid, band, and shrink wrap)
+ Special adds (anything that I have to add extra, material, etc.)
= Total price
After you have done it a few times and get a little experience, you will have a good idea on the tooling. For instance, I have a table tied to this spreadsheet where I can quickly retrieve info on tooling life with different materials. The table includes new price and sharpening cost.
Typically, I am machining someone else's material. So I have no material cost, nor do I have any waste. The "special adds" field is in the event that I do supply the material.
You will notice I charge a different rate for CNC time than I do for programming time. This is because it costs more to run the P2P than it does for me to sit on my butt in the office.
Brian Personett, forum technical advisor
Basically it's (M(w)+L(b))P=S
Let me explain:
M= All material cost
w= Wastage factor (about 10%)
L= All labor charge
b= Shop burden (about 40%)
P= Profit markup (10-30%)
S= Sales Prices
The shop burden is calculated like this:
Total Shop charges (rent, electricity, phone, etc.): What the shop would cost if you were to open it at the beginning of the year, and not produce anything during that period. For example, 140,000.
Let’s say you have seven men working 2000 billable hours per year. That’s 14,000 hours total. This means that one hour of shop time will cost you $10. Let's say that the average cabinetmaker’s salary is $20/h, including social benefits. This means that your shop rate should be $30/h, (20/h+10/h(burden). The shop burden would be 50%.
The formula would read like this
($100 Material+10%waste)
+1h labor +(50% burden)
multiplied by 1.3 (30% profit)
((100*1.1)+(20*1.5))1.3=
Sale price of $182
I picked up this formula 10 years ago in 'Fine woodworking'.
