Education Career Articles

Connect Facebook Connect Twitter Connect Google+ Connect Pinterest Connect Stumbleupon

What Do Cost Estimators Do?

Job Descriptions September 24, 2013

A cost estimator is not Merlin the Wizard, by any means. However, the cost estimator must know what it will cost to complete a product, any product, whether it is for a hamburger or an automobile. The ability to do that may well mean the difference between success and failure for a company. Marketing and management decisions play into that success also, but if the price is not right, there is no chance of success.

Make it a Point to Know All of the Details

The cost estimator must take all aspects into account and project spikes in materials if possible. An example of that would be Kodak in the 1980s. They were extremely successful and had been for generations. Their cost and profit point were dead on until a pair of brothers tried to corner the silver market.

Silver was an extremely important part of making film. When the price went from $4 a troy ounce to $50 it almost broke the company’s back. There was the reclaimed silver market, but it produced an inferior product. They struggled through, but it would end up being their downfall.

Most chain restaurants know all prices down to the penny. Pizza Hut has had a training film that talked about employees reusing their paper cups, and this would have been an item caught by a price estimator. The short presentation went from one cent cups times the number of employees, times the number of cups used each day, times the number of stores, and you ended up with a $500,000 dollar loss to the company.

Simple things add up, and it is the cost estimator’s job to find them. Pizza Hut would go to plastic, reusable, cups. It seems the significantly higher initial costs would be reduced over time. Simple things are what make a huge difference.

A restaurant knows exactly how much each product will cost because of portion control. The reason they have to know is that the cost of the food is probably their smallest and most controllable expense. On top of that, you must figure in the building, utilities (how early do you turn your lights on at night?), repair, and other items such as serving containers. Then there are the employees, the most difficult aspect to control.

What About Employee Cost?

Why is employee cost critical? You look at an employee and think; he or she cost the company $8 an hour. You could not be more wrong; that is just the salary. There is the employer Social Security contribution, about 4% of the wage, unemployment insurance, workers compensation, any health insurance, uniforms, and other associated costs. A cost estimator must take all of those and boil them down to a cost per employee so that the number of staff can be adjusted for so that the company can make a profit.

Sometimes, as with Ford in the 1950s, when they came out with the Continental MKII, price was no object. The cost estimators (fondly called bean counters) estimated that Ford could not sell the car for over $10,000 and would lose $10,000 per car.

The estimations were proven correct when the car was produced. Sometimes the loss on a certain product due to cost is overshadowed by the “halo” effect it produces. It is the cost estimator’s job to know what those losses will be so that they can be adjusted. It is the unexpected that closes company doors.

What Must You Know Before Job Searching?

A bachelor’s degree is the most often-noted requirement for a cost estimator. Depending on the industry a person would work in, the degree could as likely be engineering as accounting. The average annual salary is around $57,000, and the demand for such people should rise as companies try to deal with the new costs associated with the Affordable Care Act, as well as rising energy and material costs.

So many things can affect the profitability of a company, making the need for a cost estimator even more essential in the future than it is now. Now is the time to plan for a career in cost estimating, when the companies desperately need a mathematician to steer them right.

Searching Searching ...

Matching School Ads
5 Program(s) Found
  • Which career path will you take – Business, Nursing, Education, Psychology? Something else? GCU offers more than 100 majors to get you started!
  • Colangelo College of Business: Features more than 25 programs from the bachelor through the master's level, including several high-demand MBA programs and an accelerated accounting degree.
  • College of Nursing and Health Care Professions: Rich 25-year history providing outstanding health care and nursing degree programs, including an RN to BSN program & master's in nursing degrees.
  • College of Education: Whether you are looking to start or advance your career as a teacher or administrator, GCU offers bachelor’s and master’s in education degrees in key areas.
  • College of Humanities and Social Sciences: Provides a job focused education and features a variety of programs from counseling and psychology to justice studies, history and English literature.
  • Does something else interest you? GCU also offers programs in Doctoral Studies; Theology; Science, Engineering & Technology; and Fine Arts & Production. Speak with an enrollment counselor today!
Good for Working Adults
  • Accredited
  • Online Courses
  • Flexible Scheduling
  • Accelerated Programs
  • Financial Aid
  • Transferable Credits
4 Program(s) Found
  • Designated as a 2015 Military Friendly® School by Victory Media, publishers of G.I. Jobs®.
  • Each program is designed to instill the knowledge, ethical values, and interpersonal skills of professional practice and to foster values of social responsibility.
  • Offers several flexible learning options, including a blended format that combines campus and online learning.
  • Several scholarship opportunities are available for students who qualify.
Good for Working Adults
  • Online Courses
  • Flexible Scheduling
  • Financial Aid
  • Transferable Credits
5 Program(s) Found
  • Online Bachelor's programs include BBA, Criminal Justice, Psychology, IT, Healthcare Management & Public Health
  • Over 115 years of delivering quality education and personalized attention to students
  • Provide a range of campus experiences and services online including advising, tutoring, student community, and career services
  • Give students and alumni access to career assistants who help with resumes, cover letters, job hunting, and more.
Good for Working Adults
  • Online Courses
  • Flexible Scheduling
  • Financial Aid
  • Transferable Credits
  • Looking for an Online Business Degree Program That May Improve Your Career Options?
  • EarnMyDegree.com Can Help You Match Your Educational Goals With Your Desired Career.
  • Whether You Are Looking to Earn a Degree Online, or Study at a Nearby Campus, This Is The Place to Connect With a College That May Be Ideal for You.
  • Browse Through Our List Of Online Colleges and Traditional Schools to Determine Potential Places to Earn a Degree NOW!
  • Online Courses
  • Online and ground-based program areas include Fashion Marketing and Management and more.
  • Students can study branding, event management, and public relations to help them prepare for a marketing career
  • Course topics include Fundamentals of Business, Brand Strategy, Project Management, and Principles of Market Research
  • Over 50 locations nationwide, with a student support team dedicated to helping students grow
  • Join our next Open House on 10/21 (10/28 @ select locations)!
Good for Working Adults
  • Flexible Scheduling
  • Financial Aid
  • Campus-based and online business programs include Entertainment Business (BS), Internet Marketing (BS), and Business Intelligence (MS)
  • Students will explore business concepts like marketing, global media management, and business technology and design
  • Courses designed to prepare students for a career in business and Career Development advisors available to all alumni
  • Full Sail offers accelerated programs, so a degree that would normally take four years takes 24 months on average
  • Online Courses

Searching Searching ...

Matching School Ads
5 Program(s) Found
  • Why Earn Your Degree from GCU?
  • Options: Choose from a variety of undergraduate and graduate degree programs in Business, Nursing, Psychology, Education & more!
  • Convenience: Complete courses online, on campus, or a combination of both!
  • Earlier Graduation: Our 4-credit courses allow you to complete your degree program in less time.
  • Transfer Friendly: We will request your transcripts, evaluate your graduate coursework, and determine your anticipated graduation date within 24 hours.
  • Quality: Grand Canyon University was founded in 1949 and is regionally accredited. Learn more today!
Good for Working Adults
  • Accredited
  • Online Courses
  • Flexible Scheduling
  • Accelerated Programs
  • Financial Aid
  • Transferable Credits
4 Program(s) Found
  • Designated as a 2015 Military Friendly® School by Victory Media, publishers of G.I. Jobs®.
  • Each program is designed to instill the knowledge, ethical values, and interpersonal skills of professional practice and to foster values of social responsibility.
  • Offers several flexible learning options, including a blended format that combines campus and online learning.
  • Several scholarship opportunities are available for students who qualify.
Good for Working Adults
  • Online Courses
  • Flexible Scheduling
  • Financial Aid
  • Transferable Credits
5 Program(s) Found
  • Online bachelor's programs include BBA, Criminal Justice, IT, Healthcare Management, Pscyhology & Public Health
  • Over 115 years of delivering quality education and personalized attention to students
Good for Working Adults
  • Online Courses
  • Flexible Scheduling
  • Financial Aid
  • Transferable Credits
  • Looking for an Online Business Degree Program That May Improve Your Career Options?
  • EarnMyDegree.com Can Help You Match Your Educational Goals With Your Desired Career.
  • Whether You Are Looking to Earn a Degree Online, or Study at a Nearby Campus, This Is The Place to Connect With a College That May Be Ideal for You.
  • Browse Through Our List Of Online Colleges and Traditional Schools to Determine Potential Places to Earn a Degree NOW!
  • Online Courses
  • Full Sail’s curriculum combines elements of creativity, art, business and life skills, technical prowess, and academic achievement.
  • Full Sail offers accelerated programs, so a degree that would normally take four years takes 24 months on average.
  • Students work with industry-standard tools and technologies, allowing them to gain practical knowledge and real-world experience.
  • Join us on Facebook, Twitter, YouTube and Instagram to interact with our community, read about grad success, and see campus images.
  • Online Courses

Login to your account

Can't remember your Password ?

Register for this site!