Glasscalc man on costing, profitability & overhead recovery pay attention to costings

For example a small unit manufacturer, making 300 units a week, at an average of 0.6m2 per unit (of any 4mm glass), will incur an Energy Surcharge on their materials of £252.00 @ 7p per kilo. A business owner can also add on an average of a further £25 for a 10% wastage figure.That ’s a total of an extra £277 per week on the cost of manufacture, just for the energy surcharge.

Mixed measurements

The mathematics for the numerous variables in pricing for the glass industry are complex. This is due to the mixed measurements of areas, linear perimeters,percentage mark-ups and each calculations, for different glass types and thicknesses.

Double-glazed unit calculations can be especially complex because of the multiple components. I have often seen situations where the selling price of a unit is making a loss,but could have made a profit if the owner were manufacturing or selling more units, with the same or minimally increased overheads.

Look at these two units of the same type at exactly the same area of one square metre: 4 x 20 x 4 @1000mm x 1000mm = 4 metre perimeter 4 x 20 x 4 @1000mm x 500mm = 5 metre perimeter

The second unit has 25% more spacer bar, sealant, tape and twice as much desiccant, but it is sold at the same price. Every single size of unit has a different manufacturing cost per square metre.

It is clear that ensuring profitability is vital to the survival of a glass business.

Understanding your manufacturing overheads, material costs and profit margins can only be achieved through the application of specialist software that is capable of component-based costing and pricing.