How do you calculate scrap cost?

Multiply scrap units by the loss per unit (material + labor + rework/disposal). Here 42 scrap units at $4.95 each equals $207.90 in total scrap cost for the run.

What is a good scrap rate in manufacturing?

Most discrete operations target under 1-2%; the 4.2% in this example is high enough to warrant a root-cause investigation. Tight machining or assembly lines often hold below 0.5%.

What is cost per good part and why does it matter?

It spreads the run's scrap cost over the units you can actually sell. Here $207.90 over 958 good units adds $0.217 to every shipped part, which is what erodes your margin.

Should labor be included in scrap cost?

Yes, if labor was already invested before the part was scrapped. This calculator adds $1.10 of labor per scrap unit because that time is gone whether or not the part ships.

What is the difference between scrap and rework?

Scrap is unrecoverable and discarded; rework can be salvaged with extra effort. This tool folds a rework or disposal burden ($0.60 per scrap unit) into the loss, but treats the units themselves as lost output.

How can I reduce my scrap cost?

Attack the biggest term first. At $3.25 material versus $1.10 labor per unit, scrapping later in the process where more value is added hurts most, so catching defects earlier cuts the cost per good part fastest.

Quality calculator

Scrap Cost Calculator

Scrap cost is the real dollar loss from parts that never make it to the customer, including the material, the labor already spent on them, and the cost to rework or dispose of them. Quality engineers, plant controllers, and continuous-improvement teams use it to put a price tag on defects so a 4% scrap rate stops being an abstraction and becomes a line item. The number that matters most is cost per good part, because it loads the waste of the run onto the units you actually ship. Seeing that a run lost $207.90 makes a fixture fix or a process tweak an easy business case.

What this calculator does

Estimate the real dollar impact of scrap, rework, and yield loss.
Use when quality losses need a number attached.
It computes total scrap cost, scrap rate, and the extra cost each shipped good part carries because of the scrap.

Formula used

Scrap rate = scrap units ÷ total units
Total scrap cost = scrap units × loss per unit
Cost per good part = scrap cost ÷ good units

Inputs explained

Total units produced: undefined
Scrap units: undefined
Material cost per unit: undefined
Labor cost per unit: undefined
Rework / disposal per scrap: undefined

How to use the result

Use it after a run or shift to quantify defect loss and prioritize which scrap drivers to attack first.
It treats every scrapped unit as a uniform loss; in reality a part scrapped at final assembly costs far more than one rejected at the first operation.

Current U.S. benchmarks

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 scrap cost? Multiply scrap units by the loss per unit (material + labor + rework/disposal). Here 42 scrap units at $4.95 each equals $207.90 in total scrap cost for the run.
What is a good scrap rate in manufacturing? Most discrete operations target under 1-2%; the 4.2% in this example is high enough to warrant a root-cause investigation. Tight machining or assembly lines often hold below 0.5%.
What is cost per good part and why does it matter? It spreads the run's scrap cost over the units you can actually sell. Here $207.90 over 958 good units adds $0.217 to every shipped part, which is what erodes your margin.
Should labor be included in scrap cost? Yes, if labor was already invested before the part was scrapped. This calculator adds $1.10 of labor per scrap unit because that time is gone whether or not the part ships.
What is the difference between scrap and rework? Scrap is unrecoverable and discarded; rework can be salvaged with extra effort. This tool folds a rework or disposal burden ($0.60 per scrap unit) into the loss, but treats the units themselves as lost output.

Last reviewed 2026-05-12.