What absorbed cost should I use for a scrapped device?

Use the standard cost rolled up to the operation where it was scrapped: material, labor and overhead added so far. A device scrapped at final test carries its full cost; one scrapped at receiving carries little more than material.

Why divide scrap cost by accepted devices?

Because accepted devices are the ones you sell, so they must recover the scrap. Compare the per accepted device figure with the scrap allowance in your standard cost.

Is scrapping a device a correction or a corrective action?

A correction. FDA's quality management system rule says a correction, such as scrap, repair, rework or adjustment, eliminates a nonconformity; corrective action removes its cause. Price the corrective action separately.

How many investigation hours does a scrap event need?

As many as its significance and risk call for. FDA expects nonconforming product to be investigated to a matching degree: sometimes in depth, sometimes a simple investigation followed by trend analysis. Log the actual hours.

MedTech Manufacturing calculator

Medical Device Scrap Cost Calculator

Put a dollar figure on scrapped devices for a cost of quality report or a yield project case. You need the scrap count, absorbed cost, disposition fees, investigation hours and rate, and accepted devices.

What this calculator does

All-in cost of scrapped devices, from absorbed value, disposition and investigation hours, per scrapped device and per accepted device.

Formula used

Absorbed value lost = scrapped devices × absorbed cost per scrapped device
Investigation cost = investigation hours × burdened hourly rate
Total scrap cost = absorbed value lost + disposition cost + investigation cost
All-in cost per scrapped device = total scrap cost ÷ scrapped devices
Scrap cost per accepted device = total scrap cost ÷ accepted devices

Inputs explained

Scrapped Devices: Devices dispositioned to scrap in this event or period.
Absorbed Cost per Scrapped Device: Standard material, labor and overhead rolled up to the scrapping operation.
Disposition Cost: Quarantine handling, controlled destruction and vendor fees for this scrap.
Investigation Hours: Nonconformance report, root cause, material review and records, all staff.
Burdened Hourly Rate: Pay, benefits and overhead per hour of the staff investigating.
Accepted Devices: Good devices released from the same lot or period.

How to use the result

Best suited to monthly cost of quality report, business case for a yield improvement project, checking the scrap allowance in standard cost.
Replacement lead time, expediting and lost sales are not included. Scrap from several operations needs one run per operation, or an absorbed cost weighted by count.

Current U.S. benchmarks

U.S. manufacturing runs at 75.7% of capacity with new factory orders at $663B per month (Federal Reserve and Census, Aug 2026).
The U.S. has 8,825 medical equipment and supplies establishments employing about 308,388 workers (Census County Business Patterns, 2023).

Common questions

What absorbed cost should I use for a scrapped device? Use the standard cost rolled up to the operation where it was scrapped: material, labor and overhead added so far. A device scrapped at final test carries its full cost; one scrapped at receiving carries little more than material.
Why divide scrap cost by accepted devices? Because accepted devices are the ones you sell, so they must recover the scrap. Compare the per accepted device figure with the scrap allowance in your standard cost.
Is scrapping a device a correction or a corrective action? A correction. FDA's quality management system rule says a correction, such as scrap, repair, rework or adjustment, eliminates a nonconformity; corrective action removes its cause. Price the corrective action separately.
How many investigation hours does a scrap event need? As many as its significance and risk call for. FDA expects nonconforming product to be investigated to a matching degree: sometimes in depth, sometimes a simple investigation followed by trend analysis. Log the actual hours.

Last reviewed 2026-10-01.