Should I charge setup separately or build it into the piece price?

Build it in when the lot keeps setup inside your target share. For smaller lots, quote setup as a one-time charge so the piece price holds steady across lot sizes.

Can I spread one setup across a whole blanket order?

Only across parts made from that one setup. If the customer releases the blanket in five lots and each needs its own setup, divide each setup by its release quantity, not the annual total.

How many setup scrap parts should I enter?

Enter the pieces a setup consumes and never ships: parts cut while dialing in offsets and first articles destroyed in inspection. Take the count from past travelers or first-article records.

What target setup share should I use?

Use your own quoting policy; the 10% default is only an example. A lower target means more jobs need a larger lot or a separate setup charge to stay inside it.

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

Setup Amortization Calculator

Find what one setup adds to each part at the quoted lot size, and the smallest lot that keeps setup inside your target share of unit cost. You need setup hours, shop rate, setup scrap, run cost and lot size.

What this calculator does

Setup cost each part carries at your lot size, and the smallest lot that keeps setup inside your target share of unit cost.

Formula used

Setup cost per lot = setup hours × shop rate + setup scrap parts × run and material cost per part
Setup cost per part = setup cost per lot ÷ lot size
Unit cost = run and material cost per part + setup cost per part; setup share = setup cost per part ÷ unit cost
Lot size for target share = setup cost per lot × (100 − target %) ÷ (target % × run and material cost per part), rounded up

Inputs explained

Setup Hours: Setup, programming and first-article hours for one run of the job.
Shop Rate: Burdened hourly rate for machine, operator and overhead.
Setup Scrap Parts: Pieces consumed dialing in or in first-article checks, never shipped.
Run and Material Cost per Part: Material, outside processing and run time at shop rate, setup excluded.
Lot Size: Good parts shipped from this one setup.
Target Setup Share: Highest setup share of unit cost your quoting policy accepts.

How to use the result

Best suited to quoting a short run or prototype lot, setting a minimum release on a blanket order.
Excludes special tooling and fixtures bought for the job; quote them as a one-time charge. Prices setup time at shop rate; lost output on a bottleneck machine costs more.

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

Should I charge setup separately or build it into the piece price? Build it in when the lot keeps setup inside your target share. For smaller lots, quote setup as a one-time charge so the piece price holds steady across lot sizes.
Can I spread one setup across a whole blanket order? Only across parts made from that one setup. If the customer releases the blanket in five lots and each needs its own setup, divide each setup by its release quantity, not the annual total.
How many setup scrap parts should I enter? Enter the pieces a setup consumes and never ships: parts cut while dialing in offsets and first articles destroyed in inspection. Take the count from past travelers or first-article records.
What target setup share should I use? Use your own quoting policy; the 10% default is only an example. A lower target means more jobs need a larger lot or a separate setup charge to stay inside it.

Last reviewed 2026-10-01.