Examples of factory overhead costs are:

Answer: (a) Direct labor used. Examples of factory overhead include amortization of manufacturing patents, production supervisor’s salaries, and factory supplies used. Direct labor used is not part of factory overhead because this cost can be directly traced to products manufactured by a company.

Salary is not factory overhead.

• Production supervisor salaries.
• Quality assurance salaries.
• Materials management salaries.
• Factory rent.
• Factory utilities.
• Factory building insurance.
• Fringe benefits.
• Depreciation.

Manufacturing overhead includes such things as the electricity used to operate the factory equipment, depreciation on the factory equipment and building, factory supplies and factory personnel (other than direct labor).

A business’s overhead refers to all non-labor related expenses, which excludes costs associated with manufacture or delivery. Payroll costs — including salary, liability and employee insurance — fall into this category. Overhead expenses are categorized into fixed and variable, according to Entrepreneur.

15 to 30 percent

Typically, labor cost percentages average 20 to 35 percent of gross sales. Appropriate percentages vary by industry, A service business might have an employee percentage of 50 percent or more, but a manufacturer will usually need to keep the figure under 30 percent.

12%

The payroll sales ratio that provides insight into the efficiency of the company’s operations is revenue per employee. To figure this ratio, you simply divide the company’s total sales revenue by its number of employees.

A good range to budget for your salary is 5 to 15 percent of your gross revenue. If your profit margin is small at the moment, start low and give yourself room for an increase in the future.

At a fundamental level a business owner or manager needs to have wages at a set % of sales. Depending on your industry, this per cent could be anywhere from 10% to 40%. The first step for any proactive manager is to find out what best practice is for his or her particular industry.

In a business that is performing well, an overhead percentage that does not exceed 35% of total revenue is considered favourable. In small or growing firms, the overhead percentage is usually the critical figure that is of concern.

In her Tips for Pricing your Handmade Goods blog on Craftsy, artesian entrepreneur Ashley Martineau suggests this formula: Cost of supplies + $10 per hour time spent = Price A. Cost of supplies x 3 = Price B. Price A + Price B divided by 2 (to get the average between these two prices) = Price C.

Multiplying your cost of materials + packaging x 4 in my jewelry pricing formula sets your retail price high enough so that if you sell your pieces at wholesale or on consignment to a shop, you’ll still make a profit. Wholesale and consignment prices are typically 50% to 60% of your retail price.

42 to 47%

The pricing formula I use and what I’ve been told by mentors is materials + labor (I charge $20 an hour) + (10% to cover overheads) x 2 = wholesale price. Then you multiply that number by 2 or 2.5 to get your retail price.

It is certainly possible to make money selling homemade jewelry online, especially if you are creating something that is a little unusual. You may also have a better chance if you can build up a positive reputation with customers on the site you choose and if you pick an area that has lower competition.

Jewelry remains a popular option as it has great potential and a strong market. It’s consistently one of the easiest items to flip for a profit. If you have the right information, you, too, can make money selling jewelry online. Jewelry, especially gold and precious gemstones, has always been a good investment.

Making jewelry is therapeutic and profitable, you can make it at home, be your own boss, work at the hours when you feel best and, above all, is a wonderful profession in which you add beauty to people’s lifes through your jewels.

Jewelry making is a viable low investment business for hands-on creatives, but crafting skills aren’t required. If you want to know how to make jewelry into a profitable business, this post is for you. We’ll explore jewelry making businesses from conception and design to production and marketing.