David Krause10.1 Seven positions
The scheme is not a formality. Its order reflects how costs actually arise in the plant: first the material, then its processing, then the superstructure of administration and sales, finally profit and terms. Skip a stage, and you lose the seamlessness of the derivation — and with it the ability to justify a price in the customer conversation.
| Pos. | Item | Rate | € / order | Source |
|---|---|---|---|---|
| Material block | ||||
| Direct material costs (MEK) | — | 250.00 | ERP purchase price | |
| + | Material overhead (MGK) | 9.0 % MEK | 22.50 | CC 100, BAB Ch. 5 |
| 1 | → Material costs (MK) | 272.50 | ||
| Manufacturing block — machine station CC 210 | ||||
| Direct labor I — production | €32/h × 4 h | 128.00 | operator wage incl. employer share | |
| Direct labor II — CAM/planning | €48/h × 1 h | 48.00 | runs offline, doesn't occupy the machine | |
| + | Residual overhead (RGK) | 35.1 % DL | 61.78 | CC 210, BAB Ch. 5 |
| + | Machine costs (MHR × time) | €46.37/MH × 4 h | 185.48 | MHR from Ch. 7 |
| + | Special direct mfg. costs (SEKF) | — | 162.00 | thread mill, order-specific |
| 2 | → Manufacturing costs (FK) | 585.26 | ||
| 3 | → Cost of production (HK = 1 + 2) | 857.76 | ||
| Administration · sales | ||||
| + | Administrative overhead (VwGK) | 11.8 % HK | 101.22 | CC 300, BAB Ch. 5 |
| + | Selling overhead (VtGK) | 6.0 % HK | 51.47 | CC 400, BAB Ch. 5 |
| + | Special direct selling costs (SEKV) | — | 0.00 | no free-delivery surcharge here |
| 4 | → Total cost (SK) | 1,010.45 | full cost without profit | |
| Price block | ||||
| + | Profit margin | 15 % SK | 151.57 | management target |
| 5 | → Net cash price (BVP) | 1,162.02 | floor at full discount take-up | |
| + | Customer cash discount 2 % "in the hundred": BVP ÷ 0.98 | 2 % | 23.71 | at 14-day payment terms |
| 6 | → Net target selling price | 1,185.73 | customer takes 2 % → exactly BVP | |
| + | VAT | 19 % | 225.29 | |
| 7 | → Gross quotation price | 1,411.02 | invoice amount | |
Cash discount and rebate are not added on top of the net cash price but calculated out of it: 1,162.02 ÷ 0.98 = €1,185.73. Whoever adds 2 % instead lands at €1,185.26 — and after the discount is taken receives only €1,161.55 instead of the calculated €1,162.02. On one order that is 47 cents; at a 2 % margin on annual revenue of two million, around €800 of pure profit is missing. The error grows quadratically with the discount rate: at a 20 % rebate the gap is already 4 % of the price.
10.2 Machine station and manual station in the same scheme
The scheme stays identical — only the manufacturing block differs. At assembly (CC 240) there is no machine hour rate; the overhead comes entirely through the labor surcharge.
| Manufacturing block | Machine station CC 210 | Manual station CC 240 |
|---|---|---|
| Direct labor costs | operator wage × time | operator wage × time |
| Overhead surcharge | RGK 35.1 % on DL | FGK 60.8 % on DL |
| Machine costs | MHR €46.37/MH × time | n/a |
60.8 % against 35.1 % suggests assembly is the more expensive station. In fact it is the opposite: at assembly the labor surcharge must carry all the station's overhead, because no machine rate stands beside it. At the milling station the RGK rate carries only the personnel-dependent remainder — the far larger part runs through the €46.37/MH. Surcharge rates of different cost centers are never directly comparable; only full hour rates are.
10.3 Reading aid: four peculiarities of practical costing
The worked example shows four points often missing from the standard literature — and they distinguish clean manufacturing costing from schematic costing.
| Peculiarity | Explanation |
|---|---|
| Two direct-labor positions (production + CAM) | The CAD/CAM programmer has their own, higher hourly rate (€48/h) than the operator (€32/h). Both are direct costs because the hours are recorded per order — only for non-attributable programming does it become overhead. |
| Machine costs as their own line | The MHR (€46.37/h) is multiplied by the machine hours and shown separately — not hidden in the overhead surcharge. That is the correct machine-hour-rate presentation. |
| RGK surcharge on both DL positions | Residual overhead relates to direct-labor production and direct-labor CAM together — it arises from total personnel deployment, not just the operator wage. |
| SEKF as its own line | The thread mill (€162) is an order-specific special tool — it does not belong in the MHR (which applies to all orders on the machine), but as a special direct manufacturing cost directly on this order. |
10.4 The lot-size effect
Setup time and programming occur once per order, independent of quantity. They spread across the lot — and that is exactly what produces the price degression every buyer knows and many cost accountants underestimate.
| Lot | Setup per unit | Total time | HK per unit | SK per unit | BVP per unit | Index |
|---|---|---|---|---|---|---|
| 1 | 60.0 min | 3.000 h | €541.31 | €637.66 | €733.31 | 120 |
| 5 | 12.0 min | 2.200 h | €469.62 | €553.22 | €636.20 | 104 |
| 10 | 6.0 min | 2.100 h | €460.66 | €542.66 | €624.06 | 102 |
| 50 ★ | 1.2 min | 2.020 h | €453.50 | €534.22 | €614.35 | 100 |
| 100 | 0.6 min | 2.010 h | €452.60 | €533.16 | €613.14 | 100 |
| 500 | 0.1 min | 2.002 h | €451.88 | €532.32 | €612.17 | 100 |
Deliberately simplified versus the reference order from 10.1: unit time 2.00 h, setup 60 min, no SEKF, no separate CAM time. Rates as in the BAB: MGK 9.0 % · RGK 35.1 % · MHR €46.37/MH · VwGK 11.8 % · VtGK 6.0 % · profit 15 %. The values are therefore not comparable with the €1,010.45 from 10.1 — there, special tools and programming are added.
The degression runs out quickly. From lot 1 to lot 10 unit costs fall by 14.9 %, from lot 50 to lot 500 by only 0.4 %. The optimum lies where the setup share falls below one to two percent of total costs — here from about lot size 50. Whoever grants further volume discounts beyond that gives away margin with no cost relief behind it.
- 1Material price current? Purchase prices age fast. Ch. 9
- 2Machine time realistic — including setup, ancillary and inspection times?
- 3CAM time recorded separately and not counted as machine time?
- 4Right cost center chosen — machine or manual station? Ch. 10.2
- 5SEKF complete: special tools, fixtures, gauges?
- 6Cash discount and rebate calculated "in the hundred", not added on?
- 7Result checked against the price floor? Ch. 11.4
Chapter 11 applies this scheme to three real manufacturing processes: CNC milling of titanium, plastic injection molding and aluminum die casting. Each brings its own peculiarity — tool wear, mold cost allocation, sprue and recirculated material.
