Contract Manufacturing, Job Shop Quoting & Make-to-Order calculator

Setup Amortization Calculator

Use this calculator to roll setup hours, shop rate, chargeable setup share, and expected first-pass success into the setup cost that should be recovered through the lot price.

What this calculator does

  • Estimate setup cost dollars that need to be recovered in a custom job quote.
  • deciding how much setup cost to include in a low-volume quote or repeat order
  • The result estimates setup dollars that should be recovered in the quote.

Formula used

  • Gross setup cost before quote adjustments = setup hours for the quoted routing × loaded setup shop rate
  • Recoverable setup cost = gross setup cost before quote adjustments × setup cost charged to the customer × expected setup first-pass success

Inputs explained

  • setup hours for the quoted routing: Include fixture setup, first-piece setup, CNC program loading, tooling pulls, material staging, and documented changeover time.
  • loaded setup shop rate: Use the applicable machine, labor, or blended shop rate with burden and overhead included.
  • setup cost charged to the customer: Use 100% when setup is fully recoverable or less when some setup is absorbed to win the work.
  • expected setup first-pass success: Use expected success after first article approval, fixture prove-out, scrap, and rework risk.

How to use the result

  • Use it to set lot charges, amortize setup across parts, justify minimum order quantities, or explain small-batch premiums.
  • Treat the result as an estimate until the RFQ package, customer drawing revision, material quote, routing, setup standard, shop rate, outside service quote, scrap history, open capacity, due date, and quoted commercial terms are confirmed for the same job, lot size, and customer order.

Common questions

  • What is the setup amortization calculator for? Use this calculator to roll setup hours, shop rate, chargeable setup share, and expected first-pass success into the setup cost that should be recovered through the lot price.
  • What information should I enter? Enter setup hours for the quoted routing, loaded setup shop rate, setup cost charged to the customer, and expected setup first-pass success from the same RFQ, customer order, routing, capacity window, or quote scenario.
  • What does the result tell me? The result estimates setup dollars that should be recovered in the quote.
  • When is the result only an estimate? Treat the result as an estimate until the RFQ package, customer drawing revision, material quote, routing, setup standard, shop rate, outside service quote, scrap history, open capacity, due date, and quoted commercial terms are confirmed for the same job, lot size, and customer order.

Last reviewed 2026-05-12.