CNC Cost

CNC Machining Cost Estimation and How to Quote a Part

How CNC cost per part actually breaks down across material, machine time, setup, tooling, and scrap, and how to assemble a quote that protects margin across different lot sizes.

A CNC quote is four buckets: material, machine time, setup amortized over the lot, and tooling consumed. Cost per part equals material cost plus machine rate times cycle time in hours plus setup cost divided by quantity plus tooling cost per part. A shop rate of 85 dollars per hour, a 6 minute cycle, and a 2 dollar material blank gives 8.50 dollars of machine time plus 2 dollars, before setup and tooling. Everything else is overhead recovery and margin layered on top. If you cannot name which bucket a dollar lives in, the quote is a guess.

Machine time is the largest variable on most jobs, and the machine rate is where shops lose money quietly. A defensible rate loads the actual cost of the spindle: operator wages plus benefits, building and utilities, maintenance, and depreciation, divided by realistic billable hours. A 250,000 dollar machining center over 5 years at 3,000 billable hours per year carries roughly 17 dollars per hour in depreciation alone, before labor. Shops that bill only 1,800 hours because of low utilization must charge more per hour to recover the same fixed cost. Use the Setup Cost calculator to separate the run rate from the one-time setup charge.

Setup is a fixed cost that must be spread across the lot, and this is where small quantities get expensive. A 90 minute setup at 85 dollars per hour is 127.50 dollars. Spread over 500 parts it adds 26 cents each. Spread over 10 parts it adds 12.75 dollars each, often more than the machining itself. This is why a part quoted at 14 dollars in quantity 500 can cost 27 dollars in quantity 10. The Changeover Reduction calculator shows what cutting a 90 minute setup to 40 minutes does to per-part cost across quantity breaks, which is how you win repeat low-volume work.

Tooling is a real per-part cost, not a lump you absorb. A 45 dollar carbide end mill rated for 60 minutes of cut life in steel costs 0.75 dollars per minute of engagement. If a part uses that tool for 4 minutes, tooling adds 3 dollars per part on tool wear alone, before inserts, drills, and taps. Roughing steel eats tools far faster than finishing aluminum, so the same cycle time carries very different tooling cost. The Tool Amortization calculator converts tool price and expected life into a per-part figure so you stop guessing at 5 percent of machine cost.

Scrap and rework silently inflate cost per good part, and estimators routinely forget it. If you run 100 parts to yield 95 good ones, every cost divides across 95, not 100, so a 20 dollar part actually costs 21.05 dollars. First-article and inspection time on tight-tolerance work adds real hours that never touch the spindle. Budget a scrap allowance by material and tolerance: 2 to 3 percent on routine aluminum, 5 to 8 percent on thin-wall or tight-tolerance steel. Quoting at zero scrap is the single most common reason a job that looked profitable finishes in the red.

Overhead and margin sit on top of direct cost, and conflating them causes chronic underquoting. Direct cost is material, machine time, setup, tooling, and scrap. Overhead, including front office, quality systems, programming, and unbilled machine idle, typically runs 20 to 40 percent of direct cost in a job shop. Margin is separate and comes after overhead recovery, commonly 15 to 30 percent depending on competition. A 20 dollar direct cost part at 30 percent overhead is 26 dollars fully burdened, and a 20 percent margin makes the quote 31.20 dollars. Skip the overhead layer and you are effectively working for free on the office.

Programming and fixturing are one-time engineering costs that behave like setup, and they must be recovered somewhere. Four hours of CAM programming at 85 dollars is 340 dollars. On a 500 piece lot that is 68 cents per part; on a 25 piece prototype it is 13.60 dollars per part. Custom soft jaws or a fixture plate can add another 200 to 800 dollars. Decide up front whether these are a separate NRE line item or amortized into piece price, because burying 340 dollars into a 25 part quote and losing the reorder means you never recover the fixture you built.

The most common quoting failures share a pattern: a right formula fed a wrong number. Cycle time estimated from cut time only, ignoring tool changes and rapids, understates machine time by 15 to 30 percent. A machine rate that omits depreciation understates cost by 15 to 20 dollars an hour. Setup spread over an optimistic quantity that never reorders leaves the fixed cost stranded. Build the quote from Milling Cycle Time or Turning Cycle Time for the true run time, load a rate that recovers real fixed cost, and amortize setup over the quantity actually on the purchase order, not the annual forecast.

Published 2026-07-01.