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What items, exactly should be included in COG?
Cog
- Thread starter osgood
- Start date
Marc Lizer
SGF, Supreme Grumble Framer
The snotty answer is:
All Goods that go into the making of the item.
Frame:
What you paid for the mldg (with freight).
cost of glue used.
cost of v-nails used.
Cost of other expendables used in making the frame (dauber, etc)
Mat:
Cost of board.
Cost of blades.
Cost of atg used.
Cost of glue used.
Cost of other espendables used in making the mat (erasers, etc)
Glass:
Landed Cost of glass.
cost of cutter wheel, as a percent.
cost of glass cleaner
Cost of backing.
Cost of bladed to cut backing.
Cost of nails used
Cost of ATG or glue for back paper
Cost of back paper.
Cost of screws.
Cost of rings.
Cost of wire.
Cost of corners.
The debate comes on the cost of mldg the total cost or the cost of the part you used?
The same for the glass and mat.
Of course some of this list is rather anal, but if you are doing a cost up bid, you need to know your costs?
OR if you are doing a cost analysis (mis-sp on porpise :>), to determine past and projected future preformance, then you can't do it half assed.
Once you get a handle on it, then you can get lazy and use plug-ins that you have been able to establish from observation.
Just wait till you get to labor time study. Now that's some serious fun going on there!
All Goods that go into the making of the item.
Frame:
What you paid for the mldg (with freight).
cost of glue used.
cost of v-nails used.
Cost of other expendables used in making the frame (dauber, etc)
Mat:
Cost of board.
Cost of blades.
Cost of atg used.
Cost of glue used.
Cost of other espendables used in making the mat (erasers, etc)
Glass:
Landed Cost of glass.
cost of cutter wheel, as a percent.
cost of glass cleaner
Cost of backing.
Cost of bladed to cut backing.
Cost of nails used
Cost of ATG or glue for back paper
Cost of back paper.
Cost of screws.
Cost of rings.
Cost of wire.
Cost of corners.
The debate comes on the cost of mldg the total cost or the cost of the part you used?
The same for the glass and mat.
Of course some of this list is rather anal, but if you are doing a cost up bid, you need to know your costs?
OR if you are doing a cost analysis (mis-sp on porpise :>), to determine past and projected future preformance, then you can't do it half assed.
Once you get a handle on it, then you can get lazy and use plug-ins that you have been able to establish from observation.
Just wait till you get to labor time study. Now that's some serious fun going on there!
Marc Lizer
SGF, Supreme Grumble Framer
Just to illustrate a point:
a 24 x 36 frame with a wide tripple mat.
In atg alone.
You will use 27 or 30 feet if you atg only at the bevel edge on both fillets and attach the dustcover with atg too.
If you, are like to do two strips of ATG. One on the inner and one on the outer edge of the mat, because it is wide, you are at about 50 feet. And if you are the framer that likes to ATG the backing board to the back of the mat, then you just added another 10 feet of atg.
So 60 feet or 20 yards of ATG used on one frame.
I think there are 36 Yards on a roll? Let's call it 40yards, for the sake of easy numbers.
You are using half a roll of ATG on one pic.
Roll costs? . . . .3 bucks?
Ka ching: 1.50 in atg
Let's not even get into the time it took to put all that ATG there.
If you are frugal, and all your staff is, then this fictional 24 x 36 could be done with as little as 20 feet of ATG
or .50 of atg (if I did the math right in my head)
And if you swith to white glue instead of ATG, or even tags of ATG and white glue you are at .10 of .15 cents in material.
So from a 1.50 to .15 depending upon materials and construciton practices.
Granted different meterials yield different product.
But that's a pretty big spread.
a 24 x 36 frame with a wide tripple mat.
In atg alone.
You will use 27 or 30 feet if you atg only at the bevel edge on both fillets and attach the dustcover with atg too.
If you, are like to do two strips of ATG. One on the inner and one on the outer edge of the mat, because it is wide, you are at about 50 feet. And if you are the framer that likes to ATG the backing board to the back of the mat, then you just added another 10 feet of atg.
So 60 feet or 20 yards of ATG used on one frame.
I think there are 36 Yards on a roll? Let's call it 40yards, for the sake of easy numbers.
You are using half a roll of ATG on one pic.
Roll costs? . . . .3 bucks?
Ka ching: 1.50 in atg
Let's not even get into the time it took to put all that ATG there.
If you are frugal, and all your staff is, then this fictional 24 x 36 could be done with as little as 20 feet of ATG
or .50 of atg (if I did the math right in my head)
And if you swith to white glue instead of ATG, or even tags of ATG and white glue you are at .10 of .15 cents in material.
So from a 1.50 to .15 depending upon materials and construciton practices.
Granted different meterials yield different product.
But that's a pretty big spread.
Any possibly any other material you may wish to track that goes into a product. This is assuming you have Quick Books or something similar.
We have our COGS for framing broken down into
Mats
Moulding
Glazing
Miscellaneous
We have our COGS for framing broken down into
Mats
Moulding
Glazing
Miscellaneous
tnframer408
SGF, Supreme Grumble Framer
Marc, as usual,is absolutely correct. You can go NUTS figuring all this out.
Severalyears ago wife and I took Fred Horton's class n Atlanta titled I think "effective pricing strategies and had to dowith effective pricing strategies. He opined that to determine your true costs, you break down everything in your business from the slightest screw to your everyday overhead then use all those numbers as a starting point to gt to your resales.
We did all that, and took particular care about the tapes, screws, wires, etc etc. A realeye opener, as Marc suggests.
That said, though, I really think and maybe you numbers guys canprove me wrong, that the real biggies--mats/mouldings/glass--are the big pieces of the COGS and that where you really drop n percentages is if you're buying by the box in moulding or taking advantage of every sale your local distributor comes up with.
Which is why, on another thread, Iwas so interested in Wall Moulding after seeing their pricing inDecor. I mean who can beat paying 3 bucks for 3 inch wide golds???? But that's another thread.
Severalyears ago wife and I took Fred Horton's class n Atlanta titled I think "effective pricing strategies and had to dowith effective pricing strategies. He opined that to determine your true costs, you break down everything in your business from the slightest screw to your everyday overhead then use all those numbers as a starting point to gt to your resales.
We did all that, and took particular care about the tapes, screws, wires, etc etc. A realeye opener, as Marc suggests.
That said, though, I really think and maybe you numbers guys canprove me wrong, that the real biggies--mats/mouldings/glass--are the big pieces of the COGS and that where you really drop n percentages is if you're buying by the box in moulding or taking advantage of every sale your local distributor comes up with.
Which is why, on another thread, Iwas so interested in Wall Moulding after seeing their pricing inDecor. I mean who can beat paying 3 bucks for 3 inch wide golds???? But that's another thread.
- Joined
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Thanks Marc,
I had a hunch that was how it worked, but wasn't absolutely sure.
My framing software gives me a cost of materials, but I have to add a wastage factor and freight costs to be more accurate.
All this accounting stuff is really difficult, but important!
I had a hunch that was how it worked, but wasn't absolutely sure.
My framing software gives me a cost of materials, but I have to add a wastage factor and freight costs to be more accurate.
All this accounting stuff is really difficult, but important!
tnframer408
SGF, Supreme Grumble Framer
Alan:
That's why some of us add an immediate $1 or so per foot to our moulding in the software config system. Customer doesn't see it as a separate cost,but, if your avverage frame is 10', and I believe that's a good industry standard, for each frame you've added $10 which should cover freight, waste, etc.
to me, $1 is a starting point; I know other folks go as high as $2 but Idon't think I can carry it that far, particularly since a couple of my suppliers ship freight free, so we amortize that one dollar among everyone and freight and spoilage are covered adequately.
That's why some of us add an immediate $1 or so per foot to our moulding in the software config system. Customer doesn't see it as a separate cost,but, if your avverage frame is 10', and I believe that's a good industry standard, for each frame you've added $10 which should cover freight, waste, etc.
to me, $1 is a starting point; I know other folks go as high as $2 but Idon't think I can carry it that far, particularly since a couple of my suppliers ship freight free, so we amortize that one dollar among everyone and freight and spoilage are covered adequately.
tnframer408
SGF, Supreme Grumble Framer
too early in the morning.
Sorry I called you Alan, Osgood
Sorry I called you Alan, Osgood
Marc Lizer
SGF, Supreme Grumble Framer
In another thread, TL, my cutthroat competitor 
(insert giggle here, she is the nice-est lady) just down the street said she wanted more discussion on this.
Let's try this:I thought I'd do a real life example. You can see pix in the Frame Design Forum
10 x 10 ID
Mldg 1.40 ft five feet needed. 7.00
12 v-nails .01 per .12
glue .10
Fabric 15.00 a yard, 1/3 yard needed 5.00
Plywood backer lets call it a buck.
glue .10
Points at .01 per .20
foam core filler x2 .25
Mat blank on bottom .33
glue .10
custom mounting hardware 5.00
This brings us to 19.20
Before Tax ticket price was 97.50 making it a Theoretical COG of 19.7%
Now let's throw in some fudge factor.
10 foot stick of mldg arrives.
14.00 for frame brings us to a 26.9% COG
But it was a X 2 order, and the other frame makes for a perfect yield.
Back to 19.7%
Now lets fudge it more.
For the two frames together:
Mldg 1.40 ft ten feet needed. 14.00
12 v-nails .01 per .24
glue .20
Fabric 15.00 a yard, 1/3 yard needed 5.00
Plywood backer lets call it a buck.
glue ..20
Points at .01 per .40
foam core filler x2 .50
Mat blank on bottom .66
glue .20
custom mounting hardware 10.00
This brings us to $32.40 COG for both., and a total ticket of 195 for both.
or a Estimated Maximum Actual COG % 16.7
Now lets get downright unfair:
You will have a actual scrap foamcore and matboard on hand.
You will have a small piece of wood or plywood, and if you go to the local hardware store, they will give you the a piece that big from the scrap bin.
We have Mandarin Natural on hand, that size is a fallout.
So now we are:
Mldg 1.40 ft ten feet needed. 14.00
12 v-nails .01 per .24
glue .20
Fabric 0.00
Plywood 0.00
glue ..20
Points at .01 per .40
foam core filler x2 .00
Mat blank on bottom .00
glue .20
custom mounting hardware 10.00
This brings us to 25.24 or an Actual Expensed 13%COG for the 2 frames.
OK. So we don't usually do a post mortem in such detail on a frame job.
But it is illuminating.
Go ahead and rip this apart.
We are going to go out of town to play in the snow. I'll be back on Monday.
(insert giggle here, she is the nice-est lady) just down the street said she wanted more discussion on this.Let's try this:I thought I'd do a real life example. You can see pix in the Frame Design Forum
10 x 10 ID
Mldg 1.40 ft five feet needed. 7.00
12 v-nails .01 per .12
glue .10
Fabric 15.00 a yard, 1/3 yard needed 5.00
Plywood backer lets call it a buck.
glue .10
Points at .01 per .20
foam core filler x2 .25
Mat blank on bottom .33
glue .10
custom mounting hardware 5.00
This brings us to 19.20
Before Tax ticket price was 97.50 making it a Theoretical COG of 19.7%
Now let's throw in some fudge factor.
10 foot stick of mldg arrives.
14.00 for frame brings us to a 26.9% COG
But it was a X 2 order, and the other frame makes for a perfect yield.
Back to 19.7%
Now lets fudge it more.
For the two frames together:
Mldg 1.40 ft ten feet needed. 14.00
12 v-nails .01 per .24
glue .20
Fabric 15.00 a yard, 1/3 yard needed 5.00
Plywood backer lets call it a buck.
glue ..20
Points at .01 per .40
foam core filler x2 .50
Mat blank on bottom .66
glue .20
custom mounting hardware 10.00
This brings us to $32.40 COG for both., and a total ticket of 195 for both.
or a Estimated Maximum Actual COG % 16.7
Now lets get downright unfair:
You will have a actual scrap foamcore and matboard on hand.
You will have a small piece of wood or plywood, and if you go to the local hardware store, they will give you the a piece that big from the scrap bin.
We have Mandarin Natural on hand, that size is a fallout.
So now we are:
Mldg 1.40 ft ten feet needed. 14.00
12 v-nails .01 per .24
glue .20
Fabric 0.00
Plywood 0.00
glue ..20
Points at .01 per .40
foam core filler x2 .00
Mat blank on bottom .00
glue .20
custom mounting hardware 10.00
This brings us to 25.24 or an Actual Expensed 13%COG for the 2 frames.
OK. So we don't usually do a post mortem in such detail on a frame job.
But it is illuminating.
Go ahead and rip this apart.
We are going to go out of town to play in the snow. I'll be back on Monday.
Marc Lizer
SGF, Supreme Grumble Framer
For those that didn't find it, the items being disected are at : this spot here!
Marc Lizer
SGF, Supreme Grumble Framer
I also would have expected more questons on this one.
I would have thought the :
"But you left out . . ." (please tell me)
or the
"How did you come to that extimate . . ." (please ask if you have a question)
or the
"Why did you include . . . ." (you get the idea)
I think that most folks instead just looked at a few costs in particular, and only used the information to try and compare what they are paying for items.
In my opinion, that is useless. But if you did that, then speak up too.
Tell me: " You pay/paid xx for xxx?" or whatever.
I would have thought the :
"But you left out . . ." (please tell me)
or the
"How did you come to that extimate . . ." (please ask if you have a question)
or the
"Why did you include . . . ." (you get the idea)
I think that most folks instead just looked at a few costs in particular, and only used the information to try and compare what they are paying for items.
In my opinion, that is useless. But if you did that, then speak up too.
Tell me: " You pay/paid xx for xxx?" or whatever.
Puppyraiser
PFG, Picture Framing God
Personally, I just scrolled slowly past it all, with eyes slightly glazed, wondering if there was going to be anything interesting to read anywhere in any of the postingszzzzzzzzzzz (My husband is the one who does the bookkeepy things... everyone pary for his continued good health)
rosetl
CGF II, Certified Grumble Framer Level 2
Hey Marc!!
I'll give it a try again --
When going through my last years COGS I was surprised to see that my Glazing cost for the year and my "stuff" costs were nearly the same---off about a percent.
That means things like ATG, V Nails, Foamboard, Cardboard corners, wire, backing paper, blades -- on an annual basis-- were nearly as much as glazing.
Curious to see if others are running about the same.
I'll give it a try again --
When going through my last years COGS I was surprised to see that my Glazing cost for the year and my "stuff" costs were nearly the same---off about a percent.
That means things like ATG, V Nails, Foamboard, Cardboard corners, wire, backing paper, blades -- on an annual basis-- were nearly as much as glazing.
Curious to see if others are running about the same.