How do you amortize pattern cost in a foundry?

Spread the variable tooling cost over the castings the pattern will make, add fixed engineering cost, then divide by volume. Here 5000 castings at $2.40 each plus $3,200 fixed totals $15,200, or $3.04 per casting.

What is pattern amortization in casting?

It is the accounting method of recovering one-time pattern and tooling cost a little at a time through the price of each casting produced, rather than charging it all upfront.

Should tooling be a separate NRE charge or in the piece price?

For low or uncertain volumes, a separate non-recurring engineering charge protects you if the program ends early. For committed high-volume work, folding it into piece price keeps the part price competitive.

What does the allocation share do?

It is the fraction of the variable tooling cost assigned to this program. At 100 percent the full $2.40 per casting applies; at 50 percent only half would be allocated, splitting the pattern across two part numbers.

How does volume affect per-casting tooling cost?

Higher covered volume spreads the fixed engineering cost thinner. The $3,200 fixed cost adds $0.64 per part across 5000 castings but only $0.32 across 10,000.

What happens if the program ends early?

Any pattern cost not yet recovered becomes an unamortized loss. This calculator assumes full volume is produced, so build a margin or NRE buffer for at-risk programs.

Foundry & Forging calculator

Pattern Cost Amortization Calculator

Pattern Cost Amortization spreads the cost of a foundry pattern, core boxes, and tooling engineering across the castings that pattern will produce. Patterns are a large upfront, non-recurring expense, so how you amortize them directly sets the per-casting price and your breakeven volume. Estimators and program managers use it to decide whether a low-volume job can absorb tooling cost or needs a tooling charge billed separately. Get the covered-volume assumption wrong and either you underprice and eat the tooling, or overprice and lose the job.

What this calculator does

Allocate pattern, core box, matchplate, tooling, or gating-revision cost across castings.
Use it when a new pattern, pattern repair, core box, rigging change, or customer revision must be recovered in part pricing.
It totals the variable per-casting tooling cost across the covered volume plus a fixed pattern engineering cost, then divides by volume for a per-casting figure.

Formula used

Total pattern cost amortization = castings covered by pattern cost × pattern cost per covered casting × pattern cost allocation + fixed pattern engineering cost
Pattern cost per casting = total cost ÷ castings covered by pattern cost

Inputs explained

Castings covered by pattern cost:
Tooling cost spread per covered casting:
Pattern cost allocation share:
Fixed pattern engineering cost:

How to use the result

Use it when quoting a new tooled part, setting amortization volume, or deciding between bundling tooling into piece price versus a separate NRE charge.
It assumes the full covered volume actually gets made; if the program ends early, the unamortized balance becomes a loss not captured here.

Current U.S. benchmarks

The producer price index for steel mill products stands at 348.53 (BLS, May 2026), up 6.7% from a year earlier. Quotes priced off last quarter's material cost miss this move.
The U.S. has 3,569 primary metal manufacturing establishments employing about 354,911 workers (Census County Business Patterns, 2023).

Common questions

How do you amortize pattern cost in a foundry? Spread the variable tooling cost over the castings the pattern will make, add fixed engineering cost, then divide by volume. Here 5000 castings at $2.40 each plus $3,200 fixed totals $15,200, or $3.04 per casting.
What is pattern amortization in casting? It is the accounting method of recovering one-time pattern and tooling cost a little at a time through the price of each casting produced, rather than charging it all upfront.
Should tooling be a separate NRE charge or in the piece price? For low or uncertain volumes, a separate non-recurring engineering charge protects you if the program ends early. For committed high-volume work, folding it into piece price keeps the part price competitive.
What does the allocation share do? It is the fraction of the variable tooling cost assigned to this program. At 100 percent the full $2.40 per casting applies; at 50 percent only half would be allocated, splitting the pattern across two part numbers.
How does volume affect per-casting tooling cost? Higher covered volume spreads the fixed engineering cost thinner. The $3,200 fixed cost adds $0.64 per part across 5000 castings but only $0.32 across 10,000.

Last reviewed 2026-05-12.