Exercise 7 Estimation of Raw Materials and Cost Requirements

Junmark Alberto December 17, 2021
FPPS 147 – ST4L
Exercise 7
ESTIMATION OF RAW MATERIALS AND COST REQUIREMENTS
I. Introduction
Every furniture require some certain costs to be produced which is why the costs should
always be considered in designing a furniture since this will help in finalizing the
budget needed so that the furniture would be done without delay and shortcomings.
The most calculated cost requirements in the furniture designing and manufacturing
process are the initial cost, the basic (standard) cost, and the real cost. These
calculations and estimations should depend on the existing cost calculations of the
similar products, current general material and labor costs, and the constructor’s
knowledge.
In this exercise, an experienced carpenter was asked about the current material and
labor costs. It is assumed that the dimensions of the garden seat shown in Figure 1.
would be sent to the said carpenter and that he would manufacture the furniture in his
own workspace but the materials needed would be provided.
Figure 1. Orthographic view of the garden seat.

II. Objectives
At the end of this exercise, the students should be able to:

1. Define the different types of cost involved in furniture production.
2. Estimate the total cost of production of a furniture.
III. Methodology
To be able to estimate the raw materials and cost requirements, the following steps were
done:
a) Computation of the total volume of the wood that would be consumed to produce
the furniture.
b) Identification of a specific wood suited for outdoor furniture production.
c) Identification of the total cost of that would be spent for buying the volume of the
wood required to produce the furniture
d) Estimation of the raw materials and cost requirements using the following formula:
a. Production Cost
b. Direct Cost
c. Indirect cost
IV. Simple Calculations
This portion of the exercise includes the computations done to be able to come up with
a sound raw material and cost requirement estimation.
Wood Volume Computation:

a) Wood frame
a. Front legs
2 x (18 in x 1.625 in x 1.5 in) = 87.75 in3
b. Back legs
2 x (36 in x 5 in x 1.5 in) = 540 in3
c. Front & back frame
2 x (39 in x 3 in x 1.625 in) = 380.25 in3
d. Side frames
2 x (14.5 in x 3 in x 1.5 in) = 130.5 in3
b) Seat
6 x (44 in x 4 in x 1 in) = 1,056 in3
c) Total volume
= 87.75 in3 + 540 in3 + 380.25 in3 + 130.5 in3 + 1,056 in3
= 2,194.5 in3 / 144 in3
= 15.24 bd.ft.
Total volume needed was rounded up to 16 bd.ft. for length or width

allowance since cuttings might not be as expected.
Direct Cost Computation:

• Direct Material Cost
o Wood cost
Php 200.00 per board foot (Grains Furniture, 2017)
= 16 bd.ft. x Php 200.00
= Php 3,200.00
o Nails cost
Php 75.00 (1 box)
o Wood glue cost
Php 300.00 (1 500mg bottle)
o Varnish cost
Php 70.00 (1 bottle)
o Total direct material cost
= Php 3,200 + Php 75.00 + Php 300.00 + Php 70.00
= Php 3,645.00
• Direct Labor Cost

o Labor hours needed
A single bench can be done in about 1 day (8 hours) based on the
carpenter my that my parents know. He estimated it since the
measurements are already given.
o Cost per hour
As per an experienced carpenter, they charge about Php 500.00 per
hour depending on the furniture to be produced.
o Total labor cost
= 8 hours x Php 500.00
= Php 4,000.00
• Other Direct Cost

o Wood shipping cost
Php 1,000.00 from Antipolo (Grains Furniture, 2017)
o Sandpaper cost
Php 500.00 ( Two 12 in x 1 meter)
o Total cost
= Php 1,000.00 + Php 500.00
= Php 1,500.00
• Total Direct Cost

Kd = Kdm + Kdl + Kdo
= Php 3,645.00 + Php 4,000.00 + Php 1,500.00
= Php 9,145.00
Indirect Cost Computation:

• Departmental Cost
o It was assumed that the furniture will be done by an experienced
carpenter in his own workspace at home so the departmental cost would
be irrelevant and would be included in the labor fee (Php 500.00 per
hour) that he would be charging instead.
= Php 0.00
• Overhead Cost
o This cost is the same with the departmental cost since the carpenter can
shoulder the other overhead costs since he can finish a single furniture
alone.
= Php 0.00
• Total Indirect Cost

Ki = Kw + Koh.
= Php 0.00 + Php 0.00
= Php 0.00
Production Cost Computation:
Kp = Kd + Ki
= Php 9,145.00 + Php 0.00
= Php 9,145.00
V. Results and Discussion
Table 1. Production cost summary of one garden seat.
Wood Cost
Php 3,200.00
Nails Cost
Direct Material
Php 75.00 (1 box)
Cost
Wood Glue Cost
Php 3,645.00
Php 300.00 (1 500mg bottle)
Varnish Cost
Direct Cost
Php 70. (1 bottle)
Php 9,145.00
Labor Cost Direct Labor Cost Production
Php 4,000.00 (8 hours) Php 4,000.00 Cost
Wood Shipping Cost Php 9,145.00
Php 1,000.00
Other Direct Cost
Sandpaper Cost
Php 1,500.00
Php 500.00 (Two 12 in x 1
meter)
Overhead Cost
---
Php 0.00 Indirect Cost
Departmental Cost Php 0.00
---
Php 0.00
The table above shows the summary of the production cost. Based on the table, the
estimated cost needed in order to produce a single garden seat is Php 9,145.00. This
cost is mainly composed of the direct cost with a total of Php 9,145.00 which was
obtained from the direct material cost, direct labor cost and other direct cost. The
estimated indirect cost has a total cost of Php 0.00 because it was assumed that the
carpenter would shoulder this cost since he would be manufacturing the furniture in his
own workspace at home. The direct cost is mostly composed of the direct labor cost of
Php 4,000.00 probably because of the overhead and departmental costs included in it.
It was followed by the material cost of Php 3,645.00 which is mainly composed of the
wood cost of Php 3,200.00.
It should taken into consideration that the estimated production cost in the table above
is only applicable for a single garden seat so it would definitely change depending on
how many garden seats are needed to be produced.
VI. Conclusion
The costs needed in order to produce a furniture is very important to be considered

when constructing a furniture design. The costs always change in time so the current
costs, whether it is a direct or indirect cost, should also be considered to know the
estimated costs of a certain furniture design.
By conducting this exercise, the different types of cost involved in furniture production
were identified and the total cost of production was estimated based on the dimensions
and the amount of the furniture needed to be produced.
VII. References
Grains Furniture. (2017, October 9). Solid Acacia Planks for Sale! Facebook.
Retrieved December 15, 2021, from
https://web.facebook.com/grainsofficial/photos/pcb.1959943147619700/1959
942710953077/
Lipford, D. (2019, November 14). Choosing the most durable wood for outdoor
furniture. Today's Homeowner. Retrieved December 15, 2021, from
https://todayshomeowner.com/choosing-durable-wood-for-a-garden-bench-
and-outdoor-furniture/

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Junmark Alberto December 17, 2021

FPPS 147 – ST4L

Figure 1. Orthographic view of the garden seat.

At the end of this exercise, the students should be able to:

Wood Volume Computation:

Total volume needed was rounded up to 16 bd.ft. for length or width

Direct Cost Computation:

• Direct Labor Cost

• Other Direct Cost

• Total Direct Cost

Indirect Cost Computation:

• Total Indirect Cost

V. Results and Discussion

Table 1. Production cost summary of one garden seat.

The costs needed in order to produce a furniture is very important to be considered

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