How do I calculate a shop rate for quoting?

Shop Rate Calculator builds a burdened hourly rate by dividing total annual costs (labor, building, utilities, indirect, and equipment) by billable machine or labor hours. Machine Hour Rate and Labor Hour Rate let you set different rates per work center, and Overhead Allocation spreads indirect cost fairly. A shop with 500,000 dollars of burden and 4,000 billable machine hours needs about 125 dollars per hour before profit just to break even.

Why do small batches cost so much more per part?

Setup Amortization is the reason: a fixed setup cost spread over 10 parts adds ten times the per-part cost it does over 100. Small Batch Premium and Lot Size Economics quantify this so your quote reflects it. If setup is 200 dollars, that is 20 dollars per part on a 10-piece run but 2 dollars on a 100-piece run. Minimum Order Quantity uses the same math to set a floor where a job is still worth running.

How do I price an expedite or rush order?

Expedite Premium prices the real cost of jumping the queue: overtime labor, bumped jobs, extra setups from breaking a planned run, and any premium freight. It is not an arbitrary markup; it recovers the disruption to Order Profitability on the jobs you displace. Make-to-Order Lead Time shows the standard lead time so the premium reflects how far you are compressing it, and the rush charge should at least cover the overtime and lost efficiency.

How do I check whether a job was actually profitable?

Order Profitability compares the quoted price against actual cost, and Job Costing Variance breaks down where estimated hours, setup, or material differed from the shop floor. Margin Leakage flags the recurring gaps, such as underquoted setup or unbilled changes, that erode Contract Manufacturing Margin. Reviewing variance by customer and part family shows which work to requote or walk away from, rather than assuming a busy shop is a profitable one.

Is it worth the effort to quote every RFQ?

RFQ Response Cost estimates the estimating and engineering hours each quote consumes, and Quote Review Workload and Engineering Quote Burden size the load on your team. Divide by Quote Win Rate to see the true cost per won job: a 15 percent win rate means seven quotes per order, so a two-hour quote actually costs about 14 hours of estimating per job won. That math tells you which RFQs and customers are worth pursuing.

What margin should I target on contract manufacturing work?

Contract Manufacturing Margin and Order Profitability let you set and test a target rather than guess. The right number depends on risk: tight-tolerance or single-source work carries more margin than simple repeat runs. Model the target margin into Job Shop Quote, then use Margin Leakage and Job Costing Variance to confirm the shop actually realizes it. Customer Change Cost and Re-Quote Impact protect the margin when scope shifts after the quote is accepted.

Manufacturing calculator category

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

This category covers the quoting and costing math a job shop or contract manufacturer needs before taking work: shop rates, setup amortization, lot economics, order profitability, and margin. It is for estimators, shop owners, and sales engineers who have to turn an RFQ into a price that wins the job and still makes money.

What this hub covers

Calculators for job shop quoting, contract manufacturing margins, shop and machine hour rates, setup amortization, lot economics, order profitability, and RFQ effort.
Browse contract manufacturing, job shop quoting & make-to-order calculators for manufacturing planning, quoting, quality, capacity, and operations decisions.

Best calculators in this category

Job Shop Quotable Capacity: Estimate quoteable job-shop capacity for a custom part RFQ or make-to-order lot.
Contract Manufacturing Margin: Calculate gross margin for a quoted contract manufacturing job or customer program.
RFQ Response Cost: Estimate the internal cost to review and respond to customer RFQs.
Awards per Estimating Hour: Estimate awarded RFQs per estimating hour for a job shop quoting pipeline.
Setup Amortization: Estimate setup cost dollars that need to be recovered in a custom job quote.
Small Batch Premium: Calculate the pricing premium needed for a small-lot or low-volume job.
Expedite Premium: Calculate the premium needed for a rush or expedited customer order.
Make-to-Order Lead Time: Estimate lead time hours for a make-to-order job routing.
Job Costing Variance: Estimate cost variance between quoted and actual job performance.
Order Profitability: Estimate expected contribution dollars for a make-to-order customer order.
Shop Rate Calculator: Calculate a blended shop rate from recoverable shop dollars and billable hours.
Machine Hour Rate: Calculate machine-hour rate for a job-shop work center or equipment group.

Common manufacturing problems solved

job shop quote
contract manufacturing
manufacturing cost estimator
RFQ
shop rate
make to order

Live market signals for this industry

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Category questions

How do I calculate a shop rate for quoting? Shop Rate Calculator builds a burdened hourly rate by dividing total annual costs (labor, building, utilities, indirect, and equipment) by billable machine or labor hours. Machine Hour Rate and Labor Hour Rate let you set different rates per work center, and Overhead Allocation spreads indirect cost fairly. A shop with 500,000 dollars of burden and 4,000 billable machine hours needs about 125 dollars per hour before profit just to break even.
Why do small batches cost so much more per part? Setup Amortization is the reason: a fixed setup cost spread over 10 parts adds ten times the per-part cost it does over 100. Small Batch Premium and Lot Size Economics quantify this so your quote reflects it. If setup is 200 dollars, that is 20 dollars per part on a 10-piece run but 2 dollars on a 100-piece run. Minimum Order Quantity uses the same math to set a floor where a job is still worth running.
How do I price an expedite or rush order? Expedite Premium prices the real cost of jumping the queue: overtime labor, bumped jobs, extra setups from breaking a planned run, and any premium freight. It is not an arbitrary markup; it recovers the disruption to Order Profitability on the jobs you displace. Make-to-Order Lead Time shows the standard lead time so the premium reflects how far you are compressing it, and the rush charge should at least cover the overtime and lost efficiency.
How do I check whether a job was actually profitable? Order Profitability compares the quoted price against actual cost, and Job Costing Variance breaks down where estimated hours, setup, or material differed from the shop floor. Margin Leakage flags the recurring gaps, such as underquoted setup or unbilled changes, that erode Contract Manufacturing Margin. Reviewing variance by customer and part family shows which work to requote or walk away from, rather than assuming a busy shop is a profitable one.
Is it worth the effort to quote every RFQ? RFQ Response Cost estimates the estimating and engineering hours each quote consumes, and Quote Review Workload and Engineering Quote Burden size the load on your team. Divide by Quote Win Rate to see the true cost per won job: a 15 percent win rate means seven quotes per order, so a two-hour quote actually costs about 14 hours of estimating per job won. That math tells you which RFQs and customers are worth pursuing.

Last reviewed 2026-05-12.