Elements of Plastic Mold Tooling Costs

Update:22-07-2021
Summary:

  In addition to the time (in hours) required to manufa […]

  In addition to the time (in hours) required to manufacture tools for a given plastic part, material items, tool maintenance and amortization are also included in estimates. It must also include the indirect costs of maintaining the tools.

 

  The cost of die steel is usually proportional to the labor involved.

 

  But it should be estimated, usually based on weight, although stock parts such as plates and pins that are processed to size can be purchased.

 

  If you are considering using a new type of mold, or a mold that the factory has not used before, it is especially important to look at the cost of steel.

 

  Many times, the estimator will be able to use standard, previously established mold material cost figures, provided that the mold is similar to many molds produced in his factory.

 

  It is not necessary to calculate the cost of each screw every time a mold or fixture is estimated, but it is necessary to know that the new tool is almost the same as the previous tool for building and analyzing material costs.

 

  Estimated need to record

 

  Estimating tool maintenance costs requires some records and experience. Most molding factories have procedures for entering maintenance costs in the accounting department's account books, and each tool has a cost.

 

  It is often difficult to learn about tools through books in a period of months or years to arrive at a typical maintenance cost.

 

  However, it is a good practice for estimators to select typical tools and follow them carefully and track the nature of repairs, actual operating hours and repair costs (in hours).

 

  After a few months, a good basis for maintenance estimates may be established.

 

  These data can then be applied to new estimates with good judgment.

 

  If a Chinese contract molder produces molds for plastic parts and then charges the customer the cost, he should not calculate mold amortization in the cost of the finished product.

 

  However, if he promises to sell finished parts at a given price and bear the cost of the mold, he must include the cost of the mold on each part delivered.

 

  Such amortization is usually calculated based on the expected number of parts or the expected total number of parts during the life of the tool, whichever is less.

 

  For example, if you expect to order 100,000 molds from a mold, and the cost of the mold is estimated to be US$1,000, you should add a cost of US$10 per thousand for mold amortization.

 

  This is equivalent to 1 cent for each molded product, which is very important for a 20-cent work.

 

  Mold amortization is 5% of the selling price of molded parts.

 

  If you ignore the mold amortization cost, it is not difficult to foresee catastrophic results. It is not uncommon to receive orders for 20,000,000 parts for seasonal products (such as automotive trim parts).

 

  Of course, a cavity will not be produced at the required speed. Maybe 100 cavities are needed, and then each cavity will be proportionally allocated 200,000 molds.

 

  Some cavities may last long enough to produce twice the quantity, but it is possible that half of the cavities will not last long enough for 100,000 moldings.

 

  Therefore, mold amortization estimates need to be carefully studied.

 

  The number of times the mold must be rebuilt during operation must be estimated, and expenses must be added accordingly.

 

  Suppose that a refrigerator manufacturer plans to build a special batch of 10,000 units in one season and needs a molded door handle, and intends to change it when designing the model for the next season.

 

  The mold will not wear out at the end of the operation, but its service life will end except for the production and maintenance parts.

 

  Amortization should be calculated by absorbing the total mold cost of 10,000 pieces, which can be as high as 10 cents per piece.

 

  The indirect cost part, usually called factory costs, is calculated by accountants.

 

  Various departments of the factory may incur different parts of the factory expenses based on accounting estimates and monitoring and maintaining records of expenses.

 

  The tool room usually averages 90% to 110% of the factory cost factor. For example, this means that 90% of direct labor costs should be added to the tool’s estimate.

 

  If the payroll requires the tool manufacturer to be $1.50 per hour and the time is estimated to be 100 hours, the direct labor cost is $150.

 

  The cost of the factory increased by 90%, or $135. Some mold shops charge a fixed hourly rate, which includes direct labor and factory costs.

 

  If the mold shop is an independent unit and not part of a large organization, this is satisfactory.

 

  A single unit’s accounting system is relatively simple compared to a system that must be designed to take care of 20 to 100 departments.

 

  The engineering cost of plastic molds is predictable. In most cost accounting systems, engineering, planning, supervision, and other so-called office departments are considered part of the factory’s general burden.

 

  For this reason, the cost of planning tools and manufacturing operations is not directly included in the estimate.

 

  If only ordinary engineering time is needed, the engineering cost can be paid in the overhead items.

 

  Usually 10 to 20 hours of engineering design is used to arrange 100 to 500 hours of tool room work.

 

  If the estimator foresaw that a certain job requires more engineering than the usual engineering, he can take this into account in the estimation.

 

  In some of these situations, he may lose his job, but at the same time he may avoid considerable losses.

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