Why is my margin lower than the markup I added?

Because margin is profit ÷ price and markup is profit ÷ cost. A 30% markup on $38.25 gives $49.73, only a 23.1% margin; a 30% margin needs $54.64, a 42.9% markup.

Should programming go in setup hours?

Yes on the first order, since it is time spent for this lot. On a repeat order with a proven program, enter only machine setup and first-article time.

How do I set quantity price breaks?

Run it at each quantity the RFQ lists, with material and outside processing quoted at that quantity. Breaks are largest where setup is a large share of part cost.

What belongs in the shop rate?

Machine depreciation, energy, maintenance, floor space, the operator's pay and benefits, and shop overhead, divided by the hours you bill. The Shop Rate Calculator builds it.

Contract Manufacturing, Job Shop Quoting & Make-to-Order calculator

Custom Part Cost Calculator

Build the cost of a custom part at the quoted lot size and the price that hits your gross margin. You need material and outside processing, run time, shop rate, setup hours and quantity.

What this calculator does

Cost of one made-to-print part from material, run time, shop rate and setup spread over the lot, with the price for your margin.

Formula used

Run cost per part = run time per part ÷ 60 min per hr × shop rate
Setup cost per part = setup hours × shop rate ÷ order quantity
Cost per part = material and outside processing + run cost per part + setup cost per part
Price per part = cost per part ÷ (1 − target gross margin); order cost and order price = per part value × order quantity
Setup share of part cost = setup cost per part ÷ cost per part

Inputs explained

Order Quantity: Parts in this lot, the quantity the setup is spread over.
Material and Outside Processing: Stock, hardware and outside finishing per part, from supplier quotes.
Run Time per Part: Run minutes summed over every routing operation, setup excluded.
Shop Rate: Burdened hourly rate for machine, operator and overhead.
Setup Hours: Setup, programming and first-article hours charged to this lot.
Target Gross Margin: Gross profit as a share of selling price, not markup on cost.

How to use the result

Best suited to building a quote from a routing, setting quantity price breaks on an RFQ, checking a customer's target price.
Excludes fixtures and special tooling bought for the job; quote them as a separate one-time charge. Excludes packaging, freight and selling overhead unless your shop rate carries them.

Current U.S. benchmarks

The U.S. prime lending rate is 7.00% (Federal Reserve via FRED, 2026-10-02). Payback and financing math should start from today's rate, not a remembered one.

Common questions

Why is my margin lower than the markup I added? Because margin is profit ÷ price and markup is profit ÷ cost. A 30% markup on $38.25 gives $49.73, only a 23.1% margin; a 30% margin needs $54.64, a 42.9% markup.
Should programming go in setup hours? Yes on the first order, since it is time spent for this lot. On a repeat order with a proven program, enter only machine setup and first-article time.
How do I set quantity price breaks? Run it at each quantity the RFQ lists, with material and outside processing quoted at that quantity. Breaks are largest where setup is a large share of part cost.
What belongs in the shop rate? Machine depreciation, energy, maintenance, floor space, the operator's pay and benefits, and shop overhead, divided by the hours you bill. The Shop Rate Calculator builds it.

Related guides

Last reviewed 2026-10-01.