—— Introduction of hourly cost rate calculation method
Digital printing technology is increasingly perfect. To enable the ability to meet the changing needs of companies and 21st century printing customers. Digital printing equipment is not only very suitable for printing short-run prints with fixed information, but also for printing customized and fully personalized prints, so that printing companies can provide customers with a variety of high value-added printing services. To adapt to this rapid change and growing market demand, insights are needed. Product development skills, data processing knowledge, and prepress processing capabilities need to pay close attention to printing production costs and formulate suitable print quotations. .
With the widespread adoption of color digital printing technology, the black-and-white digital printing used in the copy shop has been applied in the traditional commercial printing field. Although this master method, which is priced at per-print or per-page cost, is quick and easy, it is not appropriate to use this method in commercial printing companies (printing fixed or variable content prints). Because this popular digital printing cost analysis usually does not take into account the full cost of the printing production process. And this incomplete cost calculation creates a misconception for print customers that this is the right price for digital printing.
In fact, the price of digitally printed single-page prints is often higher than that of equipment manufacturers; if the printing manufacturers want to make profits, the quotations given to customers cannot be the cost price, and since personalized prints can stimulate more customer feedback On-demand printing for specific target groups can reduce the number of prints, reduce the amount of print inventory, and actually increase the value that customers receive. The reduction in the volume of printed copies of the old version enables customers to obtain the latest, flexible, and diverse prints with minimal investment. Digital printing companies should therefore receive more returns.
Hourly cost calculation methods In commercial printing companies, there are many different methods of calculating costs and prices. The most widely used is the hourly rate calculation method. It is usually used to determine the production costs of various costing centers such as prepress, printing, and various postpress processing. The time spent on the job accounting at all costs is multiplied by the rate, plus the direct material cost, to calculate the production cost of the job at a cost accounting center. The total cost of job production plus the total cost of the printing company (ie, management costs and sales costs) is the total cost of the job. Based on this, plus the profit portion, the result is the final sales pricing.
The practice of dividing the production process into different cost accounting centers has been widely accepted by the commercial printing industry. Although this costing system was developed for offset printing, it is equally applicable to digital printing processes.
The digital printing system should be divided into multiple costing centers. Unlike traditional offset printing, the digital printing system integrates prepress and printing operations. Its super-functional workstation can handle prepress work as well as print jobs. It is possible to establish an independent cost accounting center objectively. Taking Heidelberg’s new era NP 2100 as an example, a digital press can become a cost accounting center, and its workstations with prepress (including RIP) and print control functions (NexStation) can be seen as another cost accounting center for the implementation of Different jobs use different rates. When a workstation controls prepress operations, it can use one rate; when it controls production operations, another rate applies. When a workstation is used for prepress and production control at the same time, a multi-task cost calculation method is needed.
When dividing the cost accounting center, you need to consider the workflow of the digital job. By analyzing the specific types of job and job flow in each case, the printing company can accurately measure the cost of the job and formulate its own best quotation plan:
1. All job preparations and prepress work for variable data have been processed offline. These jobs can be done by the printing factory's prepress process, or by the printing customer or other unit. When the data is transmitted to the digital printing control workstation, it is already an electronic document prepared for completion before printing. Although it is now possible to make a final check of the output of these data or to make some minor adjustments, in general, the documents sent to the control station should be ready for immediate printing. The content of these electronic documents can be fixed or variable.
2. The original data file is directly transmitted to the control station. Subsequently, all data processing work, formatting procedures, and processing of variable content are performed by the software of the digital printing system. The page layout work can be completed by the designer after being completed offline and input to the workstation. It can also be done directly on the workstation. This type of preparation is usually known as variable data printing. But it can also be used to print fixed content.
3, mixed data processing. That is, some steps are done offline (possibly by the customer) and some steps are done on the workstation. In these cases, the job ticket is processed by the workstation so that the correct job parameters can be entered and the appropriate type of paper can be installed on the press.
If a digital printing system is mostly used for the printing of fixed information, it only bears little or no pre-press processing work, or the processing of variable information is completely off-line, then the workstations and printing machines are classified as a cost accounting center fee. The rate can meet the requirements. However, if the workstation performs prepress work and controls the press, it is better to use two different costing center rates.
The hourly rate consists of the total cost of production divided by the hourly production time, and the resulting value is the hourly rate. The total cost of production consists of many cost items. It includes equipment costs, production site occupancy costs, direct labor costs, management fees, and other overhead costs. Some of the above costs are direct, some are indirect, some can be easily identified and included in the cost accounting center; some need to be reasonably simplified before they can be assigned to the cost accounting center. It must be clear that direct costs are only part of the hourly rate. Sometimes, some indirect costs are even greater than direct expenses. Indirect expenses are usually fixed and will not generally increase or decrease during the operation of a company. In most cases, indirect costs are allocated to cost centers and included in hourly rates. Otherwise, all costs will not be recovered through the pricing of jobs.
Equipment Costs Equipment costs or equipment-related costs are known as entitlement costs. It includes equipment depreciation expenses (in terms of purchased equipment), rental costs, maintenance costs, electricity, equipment insurance (such as personal insurance or accident insurance), as well as relevant taxes and fees collected by the government. Equipment depreciation or rental costs directly correspond to each device.
Production site occupancy costs According to the printing company's use of the site is the company's or leased, its cost of occupancy is not the same. If the site is the company's own, site occupancy costs include factory depreciation charges, mortgage payments (if any), housing usage fees (such as utilities, heating and air conditioning, sewage charges, etc.) and house and site maintenance fees. If the house used is rented, the house occupancy cost includes the rent and the corresponding above-mentioned expenses (which the manufacturer needs to pay according to the terms of the rental agreement). After the cost is determined, the cost is divided by the square meter of the total occupied area to get the cost per square meter. With the cost per cubic metre of the cost per square meter occupied by the number of rice produced by the cost center (including sufficient operating equipment in the workplace), the cost of housing costs in the cost center will be obtained.
Labor cost refers to labor or labor-related costs, including the direct wages of employees who perform productive work, tax-related taxes and various subsidies, and indirect labor costs (including shipment, receipt and delivery, storage, and other support for print production. Cannot be classified as indirect charges for printing jobs, management fees, etc. Direct wages or direct labor costs and their associated payroll taxes and subsidies should be allocated based on the percentage of time workers spend working in a cost center.
Indirect labor costs, including indirect labor wages, payroll taxes, and various subsidies, can only be included in the cost center of the related indirect labor. For example, the labor costs of transporting materials from the warehouse to the printing room should be included in the printing cost center. According to the method of calculating indirect labor costs, management costs are included in the corresponding cost centers. The wage costs such as salaries, salary taxes, and subsidies for printing shop managers can only be included in the cost center of the printing shop. The salary cost of the manager who manages the entire plant business shall be included in all cost centers of the whole plant.
Indirect production costs There are some costs that cannot be directly allocated to various cost accounting centers. Although these expenses do not directly support a cost accounting center, they are actually the actual cost of the printing company. These factory-wide or indirect production costs must be included in the hourly rate of the cost center in order to obtain the company's overall balance of payments. In general, these costs should be calculated according to the distribution percentage and be allocated to each cost center with the same standard.
The total production cost adds up all relevant costs in each cost accounting center, and the total production cost of the center is obtained. Dividing the total production cost by the payable production time for a particular job, the resulting value is the estimated small hourly rate for each cost center. If the printer uses a printed page or unit price method, the total production cost is divided by the estimated production volume of each cost center, and the expected unit rate is obtained.
The number of hours that should be charged By definition, the number of hours that should be charged is the time required to produce a user's print job. This part of the time requires the user to pay a fee that will be used to balance all costs. Non-pay items that should not be paid by users include equipment maintenance, training and staff meetings, reprints of scrap or unqualified products, and lost time due to lack of work. For a typical single-shift printing plant, the chargeable time only accounts for 75% of all working hours. At this time, 75% of the number of working hours (this is the time that someone operates the equipment and can be used to produce the job) should be used to calculate the hourly rate.
This final calculation will be used to project the hourly rate. But this is not the final result. There are also some non-productive costs that should also be taken into account. Sales, customer service, and general management fees can increase the total cost significantly. Digital printing equipment must take project development costs into consideration.
Distribution of General Management Fees Each item of printed product will be subject to a number of comprehensive management fees for the project, such as budget preparation and job planning expenses. (In some companies, budget and job planning fees are sometimes included in production overheads, sometimes Included in sales expenses, also includes advertising, promotion, transportation, telephone, office and other miscellaneous expenses. These costs must be assigned to the company's operating cost center. When analyzing the cost per page of digital printing, the general management fee is often overlooked.
Sales expense and customer service Some printing companies simply count all sales expenses into the general management fee. Others separately record sales and marketing expenses, including the cost of sales and marketing workforce, and some subjects directly associated with the project, including advertising fees, promotional fees, sales fees for sales staff, and sometimes even office occupancy fees. . In fact, they consider the selling cost as a cost accounting center. For digital printing companies, especially if there is a group of sales people who specialize in this work, it is advisable to record such fees separately in a cost center in order to clearly identify such cost of sales.
The development of a project The printing of variable content jobs is complex and often requires a great deal of effort from the printer. Although sales staff are sometimes able to provide assistance for project development, they are more likely to rely on technicians who have deeper data and information processing knowledge, understand the requirements of variable content job types, and have a good understanding of customer needs.
The hourly rate can be calculated by dividing the total cost of each cost center by the expected time of charge. Based on the budgeted hourly rate, the cost of each print job can be calculated by determining the number of hours required for the job and the amount of material consumed. This data
Digital printing technology is increasingly perfect. To enable the ability to meet the changing needs of companies and 21st century printing customers. Digital printing equipment is not only very suitable for printing short-run prints with fixed information, but also for printing customized and fully personalized prints, so that printing companies can provide customers with a variety of high value-added printing services. To adapt to this rapid change and growing market demand, insights are needed. Product development skills, data processing knowledge, and prepress processing capabilities need to pay close attention to printing production costs and formulate suitable print quotations. .
With the widespread adoption of color digital printing technology, the black-and-white digital printing used in the copy shop has been applied in the traditional commercial printing field. Although this master method, which is priced at per-print or per-page cost, is quick and easy, it is not appropriate to use this method in commercial printing companies (printing fixed or variable content prints). Because this popular digital printing cost analysis usually does not take into account the full cost of the printing production process. And this incomplete cost calculation creates a misconception for print customers that this is the right price for digital printing.
In fact, the price of digitally printed single-page prints is often higher than that of equipment manufacturers; if the printing manufacturers want to make profits, the quotations given to customers cannot be the cost price, and since personalized prints can stimulate more customer feedback On-demand printing for specific target groups can reduce the number of prints, reduce the amount of print inventory, and actually increase the value that customers receive. The reduction in the volume of printed copies of the old version enables customers to obtain the latest, flexible, and diverse prints with minimal investment. Digital printing companies should therefore receive more returns.
Hourly cost calculation methods In commercial printing companies, there are many different methods of calculating costs and prices. The most widely used is the hourly rate calculation method. It is usually used to determine the production costs of various costing centers such as prepress, printing, and various postpress processing. The time spent on the job accounting at all costs is multiplied by the rate, plus the direct material cost, to calculate the production cost of the job at a cost accounting center. The total cost of job production plus the total cost of the printing company (ie, management costs and sales costs) is the total cost of the job. Based on this, plus the profit portion, the result is the final sales pricing.
The practice of dividing the production process into different cost accounting centers has been widely accepted by the commercial printing industry. Although this costing system was developed for offset printing, it is equally applicable to digital printing processes.
The digital printing system should be divided into multiple costing centers. Unlike traditional offset printing, the digital printing system integrates prepress and printing operations. Its super-functional workstation can handle prepress work as well as print jobs. It is possible to establish an independent cost accounting center objectively. Taking Heidelberg’s new era NP 2100 as an example, a digital press can become a cost accounting center, and its workstations with prepress (including RIP) and print control functions (NexStation) can be seen as another cost accounting center for the implementation of Different jobs use different rates. When a workstation controls prepress operations, it can use one rate; when it controls production operations, another rate applies. When a workstation is used for prepress and production control at the same time, a multi-task cost calculation method is needed.
When dividing the cost accounting center, you need to consider the workflow of the digital job. By analyzing the specific types of job and job flow in each case, the printing company can accurately measure the cost of the job and formulate its own best quotation plan:
1. All job preparations and prepress work for variable data have been processed offline. These jobs can be done by the printing factory's prepress process, or by the printing customer or other unit. When the data is transmitted to the digital printing control workstation, it is already an electronic document prepared for completion before printing. Although it is now possible to make a final check of the output of these data or to make some minor adjustments, in general, the documents sent to the control station should be ready for immediate printing. The content of these electronic documents can be fixed or variable.
2. The original data file is directly transmitted to the control station. Subsequently, all data processing work, formatting procedures, and processing of variable content are performed by the software of the digital printing system. The page layout work can be completed by the designer after being completed offline and input to the workstation. It can also be done directly on the workstation. This type of preparation is usually known as variable data printing. But it can also be used to print fixed content.
3, mixed data processing. That is, some steps are done offline (possibly by the customer) and some steps are done on the workstation. In these cases, the job ticket is processed by the workstation so that the correct job parameters can be entered and the appropriate type of paper can be installed on the press.
If a digital printing system is mostly used for the printing of fixed information, it only bears little or no pre-press processing work, or the processing of variable information is completely off-line, then the workstations and printing machines are classified as a cost accounting center fee. The rate can meet the requirements. However, if the workstation performs prepress work and controls the press, it is better to use two different costing center rates.
The hourly rate consists of the total cost of production divided by the hourly production time, and the resulting value is the hourly rate. The total cost of production consists of many cost items. It includes equipment costs, production site occupancy costs, direct labor costs, management fees, and other overhead costs. Some of the above costs are direct, some are indirect, some can be easily identified and included in the cost accounting center; some need to be reasonably simplified before they can be assigned to the cost accounting center. It must be clear that direct costs are only part of the hourly rate. Sometimes, some indirect costs are even greater than direct expenses. Indirect expenses are usually fixed and will not generally increase or decrease during the operation of a company. In most cases, indirect costs are allocated to cost centers and included in hourly rates. Otherwise, all costs will not be recovered through the pricing of jobs.
Equipment Costs Equipment costs or equipment-related costs are known as entitlement costs. It includes equipment depreciation expenses (in terms of purchased equipment), rental costs, maintenance costs, electricity, equipment insurance (such as personal insurance or accident insurance), as well as relevant taxes and fees collected by the government. Equipment depreciation or rental costs directly correspond to each device.
Production site occupancy costs According to the printing company's use of the site is the company's or leased, its cost of occupancy is not the same. If the site is the company's own, site occupancy costs include factory depreciation charges, mortgage payments (if any), housing usage fees (such as utilities, heating and air conditioning, sewage charges, etc.) and house and site maintenance fees. If the house used is rented, the house occupancy cost includes the rent and the corresponding above-mentioned expenses (which the manufacturer needs to pay according to the terms of the rental agreement). After the cost is determined, the cost is divided by the square meter of the total occupied area to get the cost per square meter. With the cost per cubic metre of the cost per square meter occupied by the number of rice produced by the cost center (including sufficient operating equipment in the workplace), the cost of housing costs in the cost center will be obtained.
Labor cost refers to labor or labor-related costs, including the direct wages of employees who perform productive work, tax-related taxes and various subsidies, and indirect labor costs (including shipment, receipt and delivery, storage, and other support for print production. Cannot be classified as indirect charges for printing jobs, management fees, etc. Direct wages or direct labor costs and their associated payroll taxes and subsidies should be allocated based on the percentage of time workers spend working in a cost center.
Indirect labor costs, including indirect labor wages, payroll taxes, and various subsidies, can only be included in the cost center of the related indirect labor. For example, the labor costs of transporting materials from the warehouse to the printing room should be included in the printing cost center. According to the method of calculating indirect labor costs, management costs are included in the corresponding cost centers. The wage costs such as salaries, salary taxes, and subsidies for printing shop managers can only be included in the cost center of the printing shop. The salary cost of the manager who manages the entire plant business shall be included in all cost centers of the whole plant.
Indirect production costs There are some costs that cannot be directly allocated to various cost accounting centers. Although these expenses do not directly support a cost accounting center, they are actually the actual cost of the printing company. These factory-wide or indirect production costs must be included in the hourly rate of the cost center in order to obtain the company's overall balance of payments. In general, these costs should be calculated according to the distribution percentage and be allocated to each cost center with the same standard.
The total production cost adds up all relevant costs in each cost accounting center, and the total production cost of the center is obtained. Dividing the total production cost by the payable production time for a particular job, the resulting value is the estimated small hourly rate for each cost center. If the printer uses a printed page or unit price method, the total production cost is divided by the estimated production volume of each cost center, and the expected unit rate is obtained.
The number of hours that should be charged By definition, the number of hours that should be charged is the time required to produce a user's print job. This part of the time requires the user to pay a fee that will be used to balance all costs. Non-pay items that should not be paid by users include equipment maintenance, training and staff meetings, reprints of scrap or unqualified products, and lost time due to lack of work. For a typical single-shift printing plant, the chargeable time only accounts for 75% of all working hours. At this time, 75% of the number of working hours (this is the time that someone operates the equipment and can be used to produce the job) should be used to calculate the hourly rate.
This final calculation will be used to project the hourly rate. But this is not the final result. There are also some non-productive costs that should also be taken into account. Sales, customer service, and general management fees can increase the total cost significantly. Digital printing equipment must take project development costs into consideration.
Distribution of General Management Fees Each item of printed product will be subject to a number of comprehensive management fees for the project, such as budget preparation and job planning expenses. (In some companies, budget and job planning fees are sometimes included in production overheads, sometimes Included in sales expenses, also includes advertising, promotion, transportation, telephone, office and other miscellaneous expenses. These costs must be assigned to the company's operating cost center. When analyzing the cost per page of digital printing, the general management fee is often overlooked.
Sales expense and customer service Some printing companies simply count all sales expenses into the general management fee. Others separately record sales and marketing expenses, including the cost of sales and marketing workforce, and some subjects directly associated with the project, including advertising fees, promotional fees, sales fees for sales staff, and sometimes even office occupancy fees. . In fact, they consider the selling cost as a cost accounting center. For digital printing companies, especially if there is a group of sales people who specialize in this work, it is advisable to record such fees separately in a cost center in order to clearly identify such cost of sales.
The development of a project The printing of variable content jobs is complex and often requires a great deal of effort from the printer. Although sales staff are sometimes able to provide assistance for project development, they are more likely to rely on technicians who have deeper data and information processing knowledge, understand the requirements of variable content job types, and have a good understanding of customer needs.
The hourly rate can be calculated by dividing the total cost of each cost center by the expected time of charge. Based on the budgeted hourly rate, the cost of each print job can be calculated by determining the number of hours required for the job and the amount of material consumed. This data
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