Costing worked example

Unit Cost at 3.45% expected scrap rate: a worked example in costing

This scenario runs the unit cost calculation on the strong side: 3.45% expected scrap rate, with every other input held at its documented default. Use before sending a quote or comparing process options.

The inputs for this scenario

  • Material cost per part: 2.5 $ (unchanged)
  • Loaded labor rate: 38 $ / hr (unchanged)
  • Cycle time: 45 sec / part (unchanged)
  • Machine / overhead rate: 55 $ / hr (unchanged)
  • Setup cost: 240 $ / run (unchanged)
  • Batch size: 500 parts (unchanged)
  • Expected scrap rate: 3.45 % (raised for this scenario; the documented default is 3)
  • Target margin: 25 % (unchanged)

Working through the calculation

  • Applying the documented formula (Labor per part = labor rate × cycle time ÷ 3,600) to the inputs above produces each figure below.
  • At this operating point the engine returns 4.29 $ / unit for unit cost, the number this scenario is built around.
  • At this operating point the engine returns 5.72 $ / unit for quote price.
  • At this operating point the engine returns 1.16 $ / unit for labor + overhead.
  • At this operating point the engine returns 0.48 $ / unit for setup adder.

How this compares with the baseline

  • Against the tool's baseline example, where expected scrap rate sits at 3% and the headline result is 4.27 $ / unit, this scenario lands almost exactly on the baseline at 4.29 $ / unit.
  • 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. Treat this as a target state: the delta against the baseline quantifies what the improvement is worth before you commit to chasing it.

Results at a glance

  • Unit cost: 4.29 $ / unit (headline result)
  • Quote price: 5.72 $ / unit
  • Labor + overhead: 1.16 $ / unit
  • Setup adder: 0.48 $ / unit

Run it with your numbers

  • Every input above is editable in the live Unit Cost calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.