Tooling worked example
Tool Amortization with tooling cost of 105,000 $: a worked example in tooling
What does the result look like when tooling cost reaches 105,000 $? The full calculation is worked below with real intermediate numbers. Use when deciding whether tooling should be quoted upfront or amortized into part price.
The inputs for this scenario
- Tooling cost: 105,000 $ (raised for this scenario; the documented default is 42,000)
- Expected life volume: 250,000 units (unchanged)
- Annual volume: 60,000 units / yr (unchanged)
- Annual tool maintenance: 1,800 $ / yr (unchanged)
Working through the calculation
- Applying the documented formula (Tooling adder = tooling cost รท life volume) to the inputs above produces each figure below.
- At this operating point the engine returns 0.45 $ / unit for tooling adder, the number this scenario is built around.
- At this operating point the engine returns 0.42 $ / unit for tooling only.
- At this operating point the engine returns 25,200 $ / yr for annual recovery.
- At this operating point the engine returns 4.17 years for recovery years.
How this compares with the baseline
- Against the tool's baseline example, where tooling cost sits at 42,000 $ and the headline result is 0.2 $ / unit, this scenario comes in 127% above the baseline at 0.45 $ / unit.
- A figure at this level is achievable when tooling cost is genuinely sustained, not just peaked for a shift. It assumes the tool actually reaches its rated life volume; if the program is cancelled early or the tool wears out sooner, the unrecovered balance falls back on you.
Results at a glance
- Tooling adder: 0.45 $ / unit (headline result)
- Tooling only: 0.42 $ / unit
- Annual recovery: 25,200 $ / yr
- Recovery years: 4.17 years
Run it with your numbers
- Every input above is editable in the live Tool Amortization calculator, which recalculates instantly and can be shared with the inputs intact.
Last reviewed 2026-05-12.