Costing worked example

Floor Space Cost at 56% space utilization: a worked example

This worked example runs the floor space cost numbers for a tougher week than the baseline: 56% space utilization instead of the typical 78%. Calculate annual and per-part cost of occupied manufacturing floor space.

The inputs for this scenario

  • Occupied floor space: 850 ft² (held at the documented default)
  • Facility cost: 18 $ / ft² / yr (held at the documented default)
  • Annual output: 95,000 units / yr (held at the documented default)
  • Space utilization: 56 % (the input this scenario stresses; the baseline uses 78)
  • Annual occupied hours: 4,200 hr / yr (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Annual space cost = square feet × cost per square foot.
  • Space cost per part works out to 0.29 $ / unit at these inputs, and this is the headline figure for the scenario.
  • Annual space cost works out to 15,300 $ / yr at these inputs.
  • Effective space cost works out to 27,321 $ / yr at these inputs.
  • Cost per occupied hour works out to 6.51 $ / hr at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where space utilization sits at 78% and the headline result is 0.21 $ / unit, this scenario comes in 39.29% above the baseline at 0.29 $ / unit.
  • Use it when comparing cell layouts, evaluating a footprint-reduction project, or allocating facility overhead to specific products. 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

  • Space cost per part: 0.29 $ / unit (headline result)
  • Annual space cost: 15,300 $ / yr
  • Effective space cost: 27,321 $ / yr
  • Cost per occupied hour: 6.51 $ / hr

Run it with your numbers

  • To rerun this with your own numbers, open the live Floor Space Cost calculator, set space utilization to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.