Articles For Improving Printing Organizations "Ideas and Insights from our experts
for improving your printing organization."
Profectus Printing Industry Business Management Consultants
Direct Manufacturing Hourly Cost Rates for Printing Equipment

Direct Manufacturing Hourly Cost Rates for Printing Equipment

Direct Manufacturing Costs are expenses that are necessary to specifically produce or manufacture a product. These expenses can consist of, but not limited to: supplies needed to operate equipment, equipment maintenance and repairs expenses, equipment asset depreciation, equipment leases, and a portion of building occupancy costs needed for the production area.

Direct Labor Costs are the annual cost of each production operator or helper directly associated with manufacturing products. This would include their wages, company paid benefits (health insurance, retirement, bonuses) and company paid payroll taxes.  Production supervisors can also be designated as direct labor.

Chargeable Production Hours are the time the equipment or service is producing billable product or work. This typically includes makeready or setup, running, and washup or cleanup. Equipment downtime for repairs or maintenance is NOT considered chargeable production time. Most Management Information Systems include a report of Chargeable Production Hours in the Job Costing or Shop Floor Data Collection application.

The Direct Manufacturing Hourly Cost Rate is the annual Direct Manufacturing Costs divided by the annual budgeted chargeable hours.

$40,000 Annual equipment Repairs and maintenance costs
+ $100,000 Annual equipment depreciation or lease costs
+ $80,000 Annual equipment labor costs (including employer paid benefits, insurance, and taxes)
  $220,000 Annual Total Direct Manufacturing Costs
/ 2,020 Annual Chargeable Production Hours (1 shift)
  $108.84 Direct Manufacturing Hourly Cost Rate

More Articles..
Profectus Printing Industry Management Consultants Profectus Printing Industry Consultants YouTube Profectus Printing Industry Consultants Twitter Profectus Cost Rates Advisor LinkedIn Profectus Cost Rates Advisor Facebook Profectus Cost Rates Advisor Pinterest Printing Industry Ideas and Insights Blog Newsletter Call Profectus Inc

Site Map
How It Works
Frequently Asked Questions
Case Study
Customer Reviews
Example Budgeted Hourly Cost Rates
Estimating and Costing MIS Software

Plans and Prices
Basic Edition
Premium Edition
Professional Edition
Quick Start Service
Order Form
About Us
Our Customers
Request a Demo
Contact Us
Help and Support
Frequently Asked Questions
Articles and Helpful Information
Buy Now
Internet Payment Gateway
100% Secure Site Site Lock 100% PCI Compliance 99.9% Uptime
© 2013-2022 Profectus Inc. All Rights Reserved. is a trademark of Profectus, Inc.