Pricing Properties > Cost Field Follow
Time, Material, and Time + Material
The “Time Cost only” setup allows the user to estimate the cost of a Service based on the time spent in completing the service. This setup is usually used with labor-intensive services.
The “Material Cost only” setup allows the user to estimate the cost of a Service based on the material quantity of the service. Materials used in producing a job and purchased in quantities are usually set up as “Material Cost only”. Some businesses prefer this method also to set up some or all of their labor intensive services. You will see examples of different service setups later in this chapter.
Some services are best defined when they are set up as “Time Cost and Material Cost”. The rest of this section explains these three setup types.
The selection in the Cost field of a Service determines the above setup types.
“Time Cost only” Setup
The cost of a “Time Cost only” Service is calculated as the following:
Total Cost = Total Time * Cost/Hr
Total Time = Setup Time + Run Time
Setup Time = Calculated from the Setup Table.
Run Time = Total number of units / Units per Hour (from Run Table)
"Material Cost only" Setup
Click the field name to open the following window that briefly explains this field.
Material Services usually do incur additional costs that result from time spent in activities, such as searching the right product and the right price, contacting the vendor, filling out and sending the order form, and receiving the shipment. The “Multiplier” is used to cover these additional costs by increasing the material cost of a Service by a fraction.
The multiplier is multiplied by the Setup Cost and Run Cost of a Service to arrive at the Total Cost of the Service.
A multiplier value of “1.0” will not increase the cost since a number multiplied by 1.0 is equal to the number itself.
Cost of a “Material Cost only” Service is calculated as in the following:
Total Cost = (Setup Cost + Run Cost) * Multiplier
Setup Cost = Calculated from the Setup Table
Run Cost = Total quantity of this Service * Unit Cost
(NOTE: Unit Cost is divided by 1,000 if “Per M (1000)” is selected in the Mat.Costs and Run Prices are field.)
“Time Cost + Material Cost” Setup
This type of setup is more suitable for copiers and digital printers because such equipment has both a relatively large overhead cost and a material cost incurred by per click charges by the equipment vendor.