What goes into the shop rate?

Your loaded labor rate plus the work center's machine hour rate: depreciation, maintenance, power, floor space and applied overhead. If your machine rate already includes the operator, enter it alone.

Why divide by (1 − scrap rate) instead of adding the scrap percentage?

Because good parts must pay for every part started. At 3% scrap you start 103.1 parts per 100 good, so cost rises 3.09%, not 3%. At 20% scrap the rise is 25%.

How much does doubling the batch save per part?

Only the setup share: setup cost per part halves each time the batch doubles. On the default part, 1,000 parts instead of 500 saves $0.25 per good part, before the cost of carrying the extra stock.

How do I turn unit cost into a quote price?

Divide unit cost by (1 − target margin), not multiply by (1 + margin): a 25% margin on $4.27 is $5.69, a 25% markup only $5.34. Add tooling, packaging and freight first.

Costing calculator

Manufacturing Cost per Unit Calculator

Build the cost of one good part for a quote: material, shop time at the cycle, setup spread over the batch, and scrap. You need the routing cycle time, shop rate and scrap history.

What this calculator does

Cost to make one good part from material, shop time, setup and scrap, and the element that drives it.

Formula used

Conversion cost per part = shop rate × cycle time ÷ 3,600 sec per hr
Cost per part started = material + conversion cost + setup cost per run ÷ batch size
Unit cost per good part = cost per part started ÷ (1 − scrap rate)
Scrap loss per good part = unit cost − cost per part started
Good parts = batch size × (1 − scrap rate); batch cost = cost per part started × batch size

Inputs explained

Material Cost per Part: Delivered material in one part started, before scrap.
Shop Rate: Loaded labor rate plus machine hour rate for the work center.
Cycle Time: Routing time per part, including load and unload.
Setup Cost per Run: Setup labor, machine time and first-piece checks for one run.
Batch Size: Parts started per run; setup is spread across them.
Scrap Rate: Share of parts started that are scrapped, from the scrap log.

How to use the result

Best suited to quoting a new part number, choosing a batch size for a repeat order, comparing two routings or work centers.
Excludes tooling amortization, secondary operations, packaging, freight and selling overhead. Rework is not modeled: scrap means parts lost, not parts repaired.

Current U.S. benchmarks

U.S. manufacturing runs at 75.7% of capacity (Federal Reserve, Aug 2026). New factory orders are up 8.5% year over year (Census).

Common questions

What goes into the shop rate? Your loaded labor rate plus the work center's machine hour rate: depreciation, maintenance, power, floor space and applied overhead. If your machine rate already includes the operator, enter it alone.
Why divide by (1 − scrap rate) instead of adding the scrap percentage? Because good parts must pay for every part started. At 3% scrap you start 103.1 parts per 100 good, so cost rises 3.09%, not 3%. At 20% scrap the rise is 25%.
How much does doubling the batch save per part? Only the setup share: setup cost per part halves each time the batch doubles. On the default part, 1,000 parts instead of 500 saves $0.25 per good part, before the cost of carrying the extra stock.
How do I turn unit cost into a quote price? Divide unit cost by (1 − target margin), not multiply by (1 + margin): a 25% margin on $4.27 is $5.69, a 25% markup only $5.34. Add tooling, packaging and freight first.

Related guides

Last reviewed 2026-10-01.