Should the scrap rate cover primary and secondary packaging?

Decide by what the per unit cost already includes. If the cost covers bottle, cap and label, count all of those as units. Shippers and cartons priced separately need their own cost figure.

What counts as a unit produced in the run?

Every finished unit the run turned out, including units later rejected for packaging defects. Using only good units understates the packaging the line consumed and hides the full scrap cost.

How do I set a target scrap rate?

Use the best sustained rate the line has achieved, not a single good shift. Set the target just above that rate, then tighten it as the line proves it can hold the better figure.

Does the disposal adder change with scrap volume?

No. It is charged as a fixed run cost, separate from the per unit scrap value. If haulage scales with scrap weight, move that portion into the per unit cost or enter a higher adder.

Personal Care, Cosmetics & Household Products calculator

Packaging Scrap Cost Calculator

Scrap rate is the share of packaging components discarded on a run, priced at the per unit packaging cost. Enter a target rate to see the excess cost above that limit.

What this calculator does

Scrapped packaging cost and cost per unit from the run size, packaging cost, scrap rate and a fixed disposal adder.

Formula used

Scrapped packaging cost = units produced in the run × packaging cost per unit × packaging scrap rate ÷ 100
Total packaging scrap cost = scrapped packaging cost + fixed disposal and handling adder
Scrap cost per unit = total packaging scrap cost ÷ units produced in the run
Target scrap cost = units produced in the run × packaging cost per unit × target scrap rate ÷ 100
Excess scrap cost = scrapped packaging cost − target scrap cost

Inputs explained

Units Produced in the Run: Units completed in the packaging run; the cost base.
Packaging Cost per Unit: Landed cost of packaging components for one finished unit.
Packaging Scrap Rate: Packaging components scrapped as a percentage of units produced.
Fixed Disposal and Handling Adder: Disposal and handling cost charged to the run.
Target Scrap Rate: Scrap rate limit the run is judged against.

How to use the result

Best suited to reconciling packaging variance after a run, sizing a scrap allowance into a quote, justifying a scrap reduction project.
One blended packaging cost per unit hides a mix of bottle, cap, label and carton costs. Scrap counts recorded after packing may miss components damaged earlier in the line.

Common questions

Should the scrap rate cover primary and secondary packaging? Decide by what the per unit cost already includes. If the cost covers bottle, cap and label, count all of those as units. Shippers and cartons priced separately need their own cost figure.
What counts as a unit produced in the run? Every finished unit the run turned out, including units later rejected for packaging defects. Using only good units understates the packaging the line consumed and hides the full scrap cost.
How do I set a target scrap rate? Use the best sustained rate the line has achieved, not a single good shift. Set the target just above that rate, then tighten it as the line proves it can hold the better figure.
Does the disposal adder change with scrap volume? No. It is charged as a fixed run cost, separate from the per unit scrap value. If haulage scales with scrap weight, move that portion into the per unit cost or enter a higher adder.

Last reviewed 2026-10-01.