Please help me as I am new in business and have been contacted to make candles in bulk. All material ,design,labels, packaging will be provided by the buyer. I have to make the candles according to specifications and design ,label and pack them in boxes and send. The problem is how do calculate my labour charges ? According to design and flat making charges ? I will have to employ help to do this as there will be a delivery date etc.
The labour is charged on a piece basis or a batch basis. When you study some material and labour costing, you will coem across a concept on job costing. This is the technique tailors use. They charge you for a job ( means stitching a blouse). Here, you pay them individually. This is also called piece costing. When you buy a batch of buns from a bakery, you pay for a batch. This is called batch costing. If the designs, the end product is similar ( 6 candles in a box), then you can charge them on a batch. Or if it is one particular candle, then on a piece. My advise would be to stick to a combination - say for x nos of candles in Design A, it would be Rs. 100. For x nos of candles in a combo of Design A and Design B it will be Rs. 150. If he has given you designs, then it makes your job easier!
Dear Archana.kc, Thanks a lot,this is what I needed to know.You have solved my problem and the formula given is excellent.
Hi Archana, I am based in India, we have recently shifted to a small township from Delhi .I have to meet the buyer,work out the logistics of making candles here and sending them to Delhi , tough luck!! Let us see how the talks progress ,thanks for your advice and interest!