Standardize proposal cost estimation for SMEs! (Excel template provided)

DY Management Research Institute

(Director Ryu Daeyoung, Ph.D. in Business Administration/Management Consultant (Finance))

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I am Ryu Dae-young, who operates 'DY Management Research Institute' on YouTube and Naver Blog.

Based on my company experience and business administration studies, I want to help those working in related practical fields. I provide a very practical approach that can immediately help across cost accounting, management, accounting, finance, business planning, investment attraction, and overall management. If you want to collaborate on the courses I've uploaded or in my areas of expertise, please contact me via email!

※ Area of Expertise:

• Management/Cost Consulting, Business Feasibility Review, Financial Business Plan Development, Management Simulation, Financial Projection Development for Investment Attraction.

• Excel practical training, Excel data visualization, work efficiency improvement using Excel. We'll cut your work time in half.

• I welcome lecture requests, work requests, and Q&A related to specialized fields and YouTube videos.

Small and medium-sized business executives must be experiencing significant difficulties in calculating proposal prices.

I created an Excel template to help with this part so you can do it easily.

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This is an 'Excel template for calculating' proposal prices easily by organizing previous year or planned costs well to derive several indicators and using these indicators.

This material consists of two parts: 'the section on calculating proposal prices' and 'how costs are aggregated into financial statements and break-even point analysis'.

※ Proposal Price Calculation Template

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1. First, we define the incurred costs as follows. Manufacturing overhead/selling and administrative expenses, and manufacturing costs are classified into material costs, labor costs, and expenses.

2. Using the data organized in step 1, derive the manufacturing overhead rate, selling and administrative expense rate, and profit margin indicators.

3. Derive the average wage rate indicator. This can be calculated by dividing the company's total direct labor costs by the total man-hours held.

4. Now you can standardize the proposal pricing work using the indicators obtained above. (Please refer to the attached photo)

※ We will examine how financial statements are created by referring to the compiled cost calculations.

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1. Manufacturing Cost Statement: This is one of the most important things for manufacturing companies - the manufacturing cost statement. I've worked through how manufacturing cost statements are created using Excel.

2. Income Statement: I solved in Excel how the manufacturing cost statement connects to the income statement.

3. Operating Level-Contribution Margin Graph: The graph below shows the variation in profit according to operating levels. This is a very important concept for decision-making in management accounting.

4. Variable Cost (Direct Cost) Income Statement: Costs are divided into fixed and variable costs to create a variable cost income statement.

5. Through the variable cost income statement, you can simulate profits based on sales revenue as shown below. Break-even point (BEP) analysis is also possible.

6. You can also calculate the sales revenue needed to achieve your target profit.

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This concludes the explanation of the materials.

If you understand only the parts explained above, it will be very helpful in running a small to medium-sized business.