Costing calculator
Unit Cost Calculator
Unit cost — the cost per part — is the fully loaded cost to produce one good unit, combining material, labor, machine and overhead time, amortized setup, and scrap yield loss. Estimators, cost engineers, and job-shop owners use it to quote jobs and compare process options. The calculator also returns the quote price at your target margin, so you can move straight from cost to price.
What this calculator does
- Roll labor, material, overhead, setup, scrap, and margin into a per-part quote.
- Use before sending a quote or comparing process options.
- Rolls material, labor, machine/overhead, amortized setup, and scrap yield loss into the fully loaded cost to ship one good part, then applies your target margin to return a quote price. Labor and overhead are converted from hourly rates using the cycle time; setup is spread across the batch.
Formula used
- Labor per part = labor rate × cycle time ÷ 3,600
- Overhead per part = machine / overhead rate × cycle time ÷ 3,600
- Setup per unit = setup cost ÷ batch size
- Base cost = material + labor + overhead + setup per unit
- Good-unit cost = base cost ÷ (1 − scrap rate)
- Quote price = good-unit cost ÷ (1 − margin)
Inputs explained
- Material cost per part: undefined
- Loaded labor rate: undefined
- Cycle time: undefined
- Machine / overhead rate: undefined
- Setup cost: undefined
- Batch size: undefined
- Expected scrap rate: undefined
- Target margin: undefined
How to use the result
- Use it before sending a quote, comparing two process routes, or deciding a batch size. Rerun whenever cycle time, wage, scrap, or batch size changes — those move the result most, and setup-per-part swings sharply on small runs.
- It covers material, labor, overhead, setup, and scrap only — add freight, packaging, and tooling/fixture amortization separately for a full landed quote. Margin here is margin-on-price (cost ÷ (1 − margin)), not cost × markup, so 25% margin gives a higher price than a 25% markup.
Current U.S. benchmarks
- As of Jun 2026, average hourly earnings in U.S. manufacturing are $30.27 (BLS), up 4.4% from a year earlier. Burdened shop rates typically run 1.3 to 1.8 times earnings once benefits and overhead are loaded.
- U.S. manufacturing runs at 75.6% of capacity (Federal Reserve, May 2026). New factory orders are up 2.3% year over year (Census).
Common questions
- How do you calculate cost per part in manufacturing? Add material cost, labor (labor rate × cycle time ÷ 3,600), machine/overhead the same way, and setup ÷ batch size, then divide that base cost by the yield (1 − scrap rate) to gross up for scrapped parts. With the page defaults that is $4.27 per good part.
- What is the formula for unit cost? Unit cost = (Material + Labor + Overhead + Setup-per-unit) ÷ (1 − scrap rate), where labor and overhead are each rate × cycle time ÷ 3,600 and setup-per-unit is setup cost ÷ batch size. Quote price = unit cost ÷ (1 − margin).
- How does batch size affect cost per part? Only the setup adder changes: setup cost ÷ batch size. At 500 parts a $240 setup adds $0.48/part; at 1,000 it is $0.24; at 100 it is $2.40 — so small runs are dramatically more expensive per part. Always state the batch size a quote assumes.
- What is a good profit margin on a machined or fabricated part? Most job shops target 20–35% gross margin. Commodity or high-volume work runs leaner at 10–20%, while specialty or low-volume work supports 35%+. Below ~12% there is little buffer for estimating error or rework.
- Should scrap be added or grossed up? Grossed up — divide the base cost by (1 − scrap rate). A 3% scrap rate adds about 3.1% to cost, because you must start more parts than you ship. Simply adding the scrap percentage understates the true cost per good part.
Last reviewed 2026-05-12.