Shop Cost Calculator
Step #1: Direct Labor
Employees that work hands on to produce the product.
List the hourly wages you’re paying them.
- Employee 01)
- 02)
- 03)
- 04)
- 05)
- 06)
- 07)
- 08)
- 09)
- 10)
All wages added together: 0.00 (1A)
Total number of Direct Labor employees 0
Average hourly wage for Direct Labor Employees (1B)
Step #2: Shop Overhead
Indirect Labor –
Employees that are indirectly involved with production
Add the cost of the following positions per month:
- Supervisor's Salary
- Drafting
- Delivery
- Janitorial
- Maintenance
Total monthly Indirect Labor : 0.00 (2A)
Divided by Direct Labor employees 0
Monthly Indirect Labor per each Direct Labor Employee (2B)
Shop Expenses – Monthly –
- Shop Mortgage or Lease pymts
- Shop Supplies
- Equipment Repairs
- Insurance – Shop
- Utilities
Subtotal-Monthly Shop Expenses (2C)
Divided by Direct Labor employees
Monthly Shop Expenses per each Direct Labor Employee (2D)
Monthly Indirect Labor per each Direct Labor Employee (2B)
Total Shop Overhead per each Direct Labor Employee (2E)
Step # 3 Administrative Overhead
Administrative Labor – Monthly Salaries
- Owners Salary
- Estimators Salary
- Project Manager Salary
- Clerical Salary
- Sales Person Salary
Monthly Administrative Salaries 0.00 (3A)
Divided by Direct Labor employees 0
Monthly Admin Salaries per each Direct Labor Employee (3B)
Office Expenses – Monthly
- Office Supplies
- Travel Expenses
- Automobile Expenses
- Marketing
- Telephone
- Business Insurance
- Life Insurance – Officers
- Bad Debts
- Bookkeeping Services
- Dues & Subscriptions
Total Monthly Estimated Office Expenses (3C)
Divided by Direct Labor employees 0
Monthly Office Expense per each Direct Labor Employee (3D)
Total Monthly Administrative Salaries & Office Expenses (3C)
Total Monthly Admin. Overhead per each Direct Labor Employee (3E)
Now that we’ve calculated all of the individual overhead cost, now all that’s left is to breakdown to hourly rates and add them all together.
Add: Total Shop Overhead per each Direct Labor Employee (2E)
Total Monthly Admin. Overhead per each Direct Labor Employee (3E)
Total Monthly Overhead per each Direct Labor Employee
Now we need to break the Monthly Overhead down to an hourly wage rate.
To do this we divide Total Monthly Overhead per each Direct Labor Employee by an average hours worked each month. (2,080 hours divided by 12) 173.33
Average hourly Overhead per each Direct Labor Employee
Average hourly wage per each Direct Labor Employee (1B)
Total Average hourly wage per each Direct Labor Employee
Now that we have determined the average hourly wage that the employees are paid, we need to add the other costs associated with them such as social security, medicare, unemployment insurance, workman's compensation, and any other benefits you may offer.
In most cases it’s safe to estimate these costs will add 20% to the hourly rate for benefits.
Total hourly Benefit costs per each Direct Labor Employee
PO Box 270687, Littleton, CO 80127
