Calculating Total Direct Cost for Work Items

1. General Information

The work item includes essential details such as:

• Work item description
• Unit of measurement
• Quantity of work items
• Per hour output
• Overhead percentage
• Profit percentage

2. Material Cost Calculation

The material cost is calculated using the following parameters:

1. Material Description
2. Material Unit
3. Material Quantity per Unit of Work
4. Unit Cost of Material
5. Total Material Cost:
   Total Material Cost = Material Quantity × Unit Cost

3. Manpower Cost Calculation

The labor cost is determined by:

1. Labor Class by Trade
2. Number of Laborers
3. Utilization Factor
4. Unit Cost per Hour
5. Total Manpower Cost:
   Total Manpower Cost = Number of Labor × Utilization Factor × Unit Cost per Hour

4. Machinery Cost Calculation

Machinery usage cost is calculated using:

1. Machine Class by Trade
2. Number of Machines
3. Utilization Factor
4. Unit Cost per Hour
5. Total Machinery Cost:
   Total Machinery Cost = Number of Machines × Utilization Factor × Unit Cost per Hour

5. Total Direct Cost Calculation

The total direct cost is obtained by summing up all costs:

• Total Cost = Material Cost + Manpower Cost + Machinery Cost
• Including Overhead and Profit:
• Final Cost = Total Cost × (1 + Overhead % + Profit %)

6. Conclusion

This guide provides a structured approach to calculating the total direct cost for any work item. Make sure to accurately input all values to ensure precise cost estimation.