Tooling worked example
Tool Amortization with tooling cost of 21,000 $: a worked example in tooling
This worked example runs the tool amortization numbers for a tougher week than the baseline: tooling cost of 21,000 $ instead of the typical 42,000 $. Spread tooling investment and maintenance across expected production volume.
The inputs for this scenario
- Tooling cost: 21,000 $ (the input this scenario stresses; the baseline uses 42,000)
- Expected life volume: 250,000 units (held at the documented default)
- Annual volume: 60,000 units / yr (held at the documented default)
- Annual tool maintenance: 1,800 $ / yr (held at the documented default)
Working through the calculation
- The calculation starts from the formula this tool documents: Tooling adder = tooling cost รท life volume.
- Tooling adder works out to 0.11 $ / unit at these inputs, and this is the headline figure for the scenario.
- Tooling only works out to 0.08 $ / unit at these inputs.
- Annual recovery works out to 5,040 $ / yr at these inputs.
- Recovery years works out to 4.17 years at these inputs.
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 42.42% below the baseline at 0.11 $ / unit.
- Use it when quoting a part that needs dedicated tooling, comparing make-versus-buy tooling options, or checking whether a tool will pay back within the program's expected length. A result at this level usually justifies acting on the stressed input before touching anything else, because every other figure in the table is downstream of it.
Results at a glance
- Tooling adder: 0.11 $ / unit (headline result)
- Tooling only: 0.08 $ / unit
- Annual recovery: 5,040 $ / yr
- Recovery years: 4.17 years
Run it with your numbers
- To rerun this with your own numbers, open the live Tool Amortization calculator, set tooling cost to your actual value, and adjust the remaining inputs to match your operation.
Last reviewed 2026-05-12.