Depreciate both costs as if you were devaluing an installation with a method such as the sum of the annual method (see Table I). Weight your fees so that interest is paid first and tool fees at the end of the contract. Add these monthly fees to your partial pricing offer. Make sure that your offer is configured so that, for example, if the customer buys one million pieces of form each year and the depreciation is three years, but buys only half a million sets, it pays not only the price of the higher molded part, but also a higher cushioned tool component. Each company faces the challenge of offsetting the costs of launching a new manufacturing project, and the toolmaker is a big thinker about costs. Add this to the original amount: $125,000 – $45,000 – $170,000. This is the total amount of tooling costs and interest that will be depreciated on 6 million formulas over three years. If you have a pledge right to the tools, your client cannot pull the tools until you have been fully compensated for this and for the loss of part of your line of credit. Most importantly, price negotiations are now in your favour, as they are both the exclusive source and owner of the tools. In your response to the tool fee refund request, these specifications are included: If your customer wants to pay the bill, just look at the table and tell them the amount you have to pay. This way you get all the interest and all the tools of the money.
If your client resists, remember that you still have the tools. Instead of temporarily paying for a product, just to give it away when your project is finished, be depreciated, depreciate the best return. At the end of the production cycle, the tool belongs to you and can be used in future projects. However, there are a number of ways to approach tool options: partial tool ownership, « free » tools or depreciated tools. While there are advantages to any option, depreciation allows you to retain full ownership of your tools, which means there are no hidden fees, but only actual values available. Total Digital Years Financial Program Adopted, the tool bill is $125,000, the program spans three years and you charge 12 percent annual interest to your client.