| In how to evaluate the purchase of a quilting machine | | | | (52 Quilts) ($144.0) ($201.0) ($240.0) ($288.0) |
| guide, I have taken a simplistic approach to time, costs | | | | 2 Year ($72.11) ($100.96) ($120.19) ($144.23) |
| and payback. There are more scientific models | | | | (104 Quilts) |
| available such as net present value and discounted | | | | 3 Year ($48.07) ($64.10) ($80.12) ($96.15) |
| cash flow but I wanted to provide a quick easy | | | | (156 Quilts) |
| evaluation for those who are considering purchasing a | | | | 4 Year ($36.05) (48.07) ($60.09) ($72.11) |
| quilting machine and wanted to know how the costs | | | | (208 Quilts) |
| can be evaluated over time and how long it would | | | | 5 Year ($28.84) ($38.46) ($48.07) ($57.69) |
| take to recover the costs incurred. | | | | (260 Quilts) |
| I have taken four values for costs, these represents | | | | Table1. Illustrates the annual costs for each quilting |
| the low end, average through to the higher end quilting | | | | machine over 1 to 5 years. |
| machines. These values are $7500, $10,000, $12,500 | | | | Table 2. shows how much the quilter has to charge to |
| and $15,000. | | | | recover the quilting machine costs based on producing |
| Time periods are the length of time to recover the | | | | 1 quilt per week over each time period. |
| above costs of the quilting machine. | | | | The above figures do not take into consideration any |
| The payback time is the length of time to recover the | | | | interest charges you may have to pay for the finance |
| costs of the quilting machine if one was to add a | | | | of the quilting machine These additional costs would |
| proportion of the costs to each quilt produced. | | | | need to be included in the above figures. Neither do the |
| Obviously if one produced more quilts over a certain | | | | above figures allow for any tax allowances that can |
| time period one would achieve an earlier payback | | | | be claimed against capital equipment. The figures are |
| point. | | | | only to illustrate how much each quilt produced should |
| The Tables below illustrates the above factors of cost, | | | | contribute to the cost of the quilting machine and how |
| time and payback over 1 year to 5 years for each | | | | to recover the quilting machine costs in your quilting |
| value range. The payback period shows various | | | | pricing. |
| calculations which will be dependent on each quilters | | | | A basic breakdown should be undertaken for all |
| circumstances with regard to the number of quilts | | | | equipment used, materials and overheads such as rent, |
| produced over a given time period. | | | | electricity. One then adds labour costs and profit |
| Table 1 Cost of Quilting Machine per Year | | | | margin to arrive at the quilt sale price. Depending on |
| Value $7,500 $10,500 $12,500 $15,000 | | | | ones business model and sales potential and local |
| 1 Year $7,500 $10,500 $12,500 $15,000 | | | | market conditions it would be matter of weighing up |
| 2 Year $3,750 $5,250 $6,250 $7,500 | | | | the benefits of various quilting machines for efficiency |
| 3 Year $2,500 $3,500 $4,167 $5,000 | | | | and output. With the above figures one can see at |
| 4 Year $1,875 $2,625 $3,125 $3,750 | | | | glance how the quilting machine costs can be |
| 5 Year $1,500 $2,100 $2,500 $3,000 | | | | recouped over various time periods based on the |
| Table 2 One Quilt per Week | | | | output of one quilt per week. |
| 1 Year $7,500 $10,500 $12,500 $15,000 | | | | |