Repair Cost

Cost Estimation and Quoting for Electronics Repair and Refurbishment Depots

A money-focused breakdown of what actually drives cost per repaired unit at an electronics depot and how to build quotes that hold up against real yield and scrap.

The dominant cost driver in depot repair is not parts, it is diagnostic and rework labor spread across units that never ship. A quote built on a 40-dollar target cost per repaired unit collapses if you price against intake volume instead of good-unit volume. At 84 percent first-pass yield and 8 percent no-fault-found, only about 77 percent of intake becomes billable repaired output, so every dollar of labor must be recovered across a smaller base. Use the Cost Per Repaired Unit calculator with the good-unit denominator, and the Diagnostic Labor Cost calculator to separate screening time from actual bench repair.

Break the per-unit cost into five buckets: direct labor, replacement parts, machine and chamber time, scrap loss, and allocated overhead. In a typical board depot, direct labor runs 45 to 60 percent of unit cost, parts 15 to 25 percent, burn-in and equipment time 8 to 15 percent, scrap 5 to 12 percent, and overhead the remainder. If diagnostic and rework labor totals 0.65 hours at a fully loaded 46 dollars per hour, that is 29.90 dollars before a single component. Quoting parts-plus-markup while eyeballing labor is the fastest way to underprice a contract by 20 to 30 percent.

Burn-in and machine time carry a real cost even when a technician is not touching the unit. A 12-hour soak in a chamber with a 240-slot capacity and roughly 900 dollars per day of energy, depreciation and maintenance works out near 3.75 dollars per unit-slot at full load, but doubles to 7.50 dollars at 50 percent utilization. Estimators routinely forget that idle chamber capacity still amortizes fixed cost. Model it with the Burn-In Test Capacity calculator, then divide daily equipment cost by realistic, not theoretical, throughput before you put a number in the quote.

Scrap and salvage move the cost in both directions. A board that fails repair after 0.5 hours of labor is a sunk 23-dollar loss you must spread across good units, but harvested parts recover some of it. If salvage nets 16.50 dollars on a scrapped board, your effective scrap loss drops from 23 to 6.50 dollars. Feed the Parts Salvage Value calculator and Refurbish vs Replace Decision Score into the quote so you are not pricing scrap at gross when your salvage program recovers 40 to 60 percent of teardown value.

Warranty exposure belongs in the quote, not in a surprise at quarter end. Repairs that fail again inside the warranty window generate free rework and return shipping. If your field return rate is 6 percent and a rework-plus-logistics event costs 55 dollars, the expected warranty cost per shipped unit is 0.06 times 55, or 3.30 dollars, that must be baked into price or held as reserve. The Electronics Warranty Reserve calculator sizes this liability so a contract priced at breakeven does not quietly turn into a loss after 90 days of returns.

Overhead allocation is where defensible quotes separate from wishful ones. Depot overhead, meaning facility, ESD-controlled benches, calibration, QA, and non-billable supervision, commonly adds 25 to 45 percent on top of direct cost. Allocate it per labor hour rather than per unit, because a 15-minute reseat and a 90-minute board-level repair do not consume overhead equally. If loaded direct cost is 34 dollars and overhead runs 35 percent, the floor before margin is about 45.90 dollars. Quoting below that on volume promises rarely recovers on mix.

The most common estimating error is treating no-fault-found units as free. They are not: a 7 to 10 percent NFF rate still consumes full diagnostic labor, often 15 to 25 minutes each, with zero repair revenue unless your contract pays a test-and-return fee. On a 1,000-unit batch, 80 NFF units at 0.35 hours and 46 dollars per hour is 1,288 dollars of unrecovered labor. Negotiate an evaluation fee, or load NFF cost across repaired units, but never quote as if every intake unit becomes a paid repair.

Build the quote bottom-up and then stress-test it against yield swings. Take good-unit cost per repaired unit, add allocated overhead, add warranty reserve per unit, then apply target margin, commonly 18 to 30 percent for contract depot work. Then rerun the math at yield 5 points below plan and NFF 3 points above; if the quote goes underwater, you have priced for a best case that will not hold. A defensible depot quote survives a bad month, and the only way to know is to model the downside before you sign, not after the first invoice dispute.

Published 2026-07-01.