Is setup cost fixed or variable?

Fixed in total for the run: the same dollars spread over more parts lowers each part's share. It becomes variable only if a split batch needs a second setup.

Should the machine rate apply during setup?

Yes. The machine is held on the job while the setup runs, so its hourly burden applies alongside the setup labor rate. Idle machines still consume shop overhead.

How do I find a realistic outside setup cost?

Use the last invoice for the service plus the consumables the setup burns: shim stock, test material, and any presetting charge. Average two or three jobs if the amount varies.

What batch size should I quote against?

The quantity the order releases, not the annual total. If the buyer splits releases, price each release separately, or the first release carries all of the setup.

Tooling calculator

Setup Cost Calculator

Spread the cost of one setup across the parts it produces. Enter setup hours, the labor and machine rates, any outside cost, the batch size, and the per-unit target.

What this calculator does

Setup labor, machine, and outside cost per unit across a batch, with a target check for quoting.

Formula used

Setup labor and machine cost = setup hours x (labor rate + machine rate)
Total setup cost = setup labor and machine cost + outside setup cost
Setup cost per unit = total setup cost / batch size
Target gap = setup cost per unit − target setup cost per unit

Inputs explained

Setup Time: Hours from the last good part to the first good part.
Setup Labor Rate: Loaded labor rate for the setup crew.
Machine Rate During Setup: Hourly burden of the machine held during setup.
Outside and Consumable Setup Cost: Bought-in setup services and consumables for the run.
Batch Size: Parts in the run that shares this one setup.
Target Setup Cost per Unit: Per-unit setup cost the quote needs to beat.

How to use the result

Best suited to quoting a repeat job with a known setup, comparing batch sizes before scheduling a run, justifying a quick-change vise or preset tooling.
Excludes fixture amortization and learning curve after the first run. Assumes the batch runs without a re-fixture or a mid-run setup.

Current U.S. benchmarks

As of Sep 2026, average hourly earnings in U.S. manufacturing are $30.21 (BLS), up 3.4% from a year earlier. Burdened shop rates typically run 1.3 to 1.8 times earnings once benefits and overhead are loaded.
The producer price index for steel mill products stands at 381.162 (BLS, Aug 2026), up 23.4% from a year earlier. Quotes priced off last quarter's material cost miss this move.
The U.S. has 17,154 machine shops establishments employing about 223,303 workers (Census County Business Patterns, 2023).

Common questions

Is setup cost fixed or variable? Fixed in total for the run: the same dollars spread over more parts lowers each part's share. It becomes variable only if a split batch needs a second setup.
Should the machine rate apply during setup? Yes. The machine is held on the job while the setup runs, so its hourly burden applies alongside the setup labor rate. Idle machines still consume shop overhead.
How do I find a realistic outside setup cost? Use the last invoice for the service plus the consumables the setup burns: shim stock, test material, and any presetting charge. Average two or three jobs if the amount varies.
What batch size should I quote against? The quantity the order releases, not the annual total. If the buyer splits releases, price each release separately, or the first release carries all of the setup.

Related guides

Managing Setup Cost: Batch Sizes and the Real Tradeoffs

Last reviewed 2026-10-02.