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How to calculate labour charges on material provided ?

Discussion in 'Indian Women Entrepreneurs' started by Candleart, Jun 1, 2009.

  1. Candleart

    Candleart Senior IL'ite

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    Please help me as I am new in business and have been contacted to make candles in bulk. All material ,design,labels, packaging will be provided by the buyer. I have to make the candles according to specifications and design ,label and pack them in boxes and send.
    The problem is how do calculate my labour charges ? According to design and flat making charges ? I will have to employ help to do this as there will be a delivery date etc.
     
    Last edited: Jun 1, 2009
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  2. archana.kc

    archana.kc Gold IL'ite

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    The labour is charged on a piece basis or a batch basis.

    When you study some material and labour costing, you will coem across a concept on job costing. This is the technique tailors use. They charge you for a job ( means stitching a blouse). Here, you pay them individually. This is also called piece costing.

    When you buy a batch of buns from a bakery, you pay for a batch. This is called batch costing.

    If the designs, the end product is similar ( 6 candles in a box), then you can charge them on a batch. Or if it is one particular candle, then on a piece.

    My advise would be to stick to a combination - say for x nos of candles in Design A, it would be Rs. 100. For x nos of candles in a combo of Design A and Design B it will be Rs. 150.

    If he has given you designs, then it makes your job easier!
     
  3. Candleart

    Candleart Senior IL'ite

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    Dear Archana.kc,
    Thanks a lot,this is what I needed to know.You have solved my problem and the formula given is excellent.
     
  4. archana.kc

    archana.kc Gold IL'ite

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    Great! So have you sent in the order? And where are you based out of in india?
     
  5. Candleart

    Candleart Senior IL'ite

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    Hi Archana,
    I am based in India, we have recently shifted to a small township from Delhi .I have to meet the buyer,work out the logistics of making candles here and sending them to Delhi , tough luck!! Let us see how the talks progress ,thanks for your advice and interest!
     

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