Free manufacturing costing tool
Test whether a proposed job price covers expected manufacturing costs and your target gross margin.
This is a planning estimate, not a customer quotation, accounting opinion, tax calculation, manufacturability assessment, capacity promise, or recommendation to accept work.
The calculation runs only in your browser. Your inputs and results are not submitted, saved, or added to the page URL.
Free manufacturing costing tool
Enter your assumptions to compare proposed revenue with expected job cost and target gross margin.
The machine rate should already include normal machine ownership, overhead, operator, maintenance, and operating costs. Add only labour and direct costs not represented by that rate.
Calculate your machine hourly rateMethod
The calculation allows for expected scrap before applying material, subcontract, cycle-time, and machine-rate costs. It then adds direct batch costs and contingency before comparing the proposed revenue with break-even and target-margin prices.
Expected started quantity is a fractional costing allowance, not a production release quantity. Keep normal ownership, overhead, operator, maintenance, and energy costs inside the machine hourly rate, and add only job-specific labour that is not already included.
Started quantity = order quantity ÷ (1 − scrap allowance)
Run hours = started quantity × cycle minutes per started part ÷ 60
Total machine hours = setup and programming hours + run hours
Machine cost = total machine hours × machine hourly rate
Variable started-part cost = started quantity × (material cost + subcontract cost per started part)
Additional labour cost = additional labour hours × additional labour rate
Base job cost = machine cost + variable started-part cost + additional labour cost + fixed batch costs
Contingency cost = base job cost × contingency
Estimated job cost = base job cost + contingency cost
Proposed revenue = acceptable quantity × proposed unit price
Estimated gross profit = proposed revenue − estimated job cost
Estimated gross margin = estimated gross profit ÷ proposed revenue
Target revenue = estimated job cost ÷ (1 − target gross margin)
Target price per acceptable part = target revenue ÷ acceptable quantity
Price gap = proposed revenue − target revenue
Break-even price per acceptable part = estimated job cost ÷ acceptable quantity
This illustrative example uses 100 acceptable parts at £28 each, 5% expected scrap, £4.50 material and £1.25 subcontract cost per started part, three setup hours, an eight-minute cycle, a £70 machine rate, four additional labour hours at £24, £180 in fixed batch costs, 5% contingency, and a 25% target gross margin. It is not client performance data.
A useful estimate includes material yield, setup and programming, cycle time, a verified machine rate, outside processing, job-specific labour, tooling, inspection or documentation effort, packaging or delivery where applicable, scrap risk, contingency, and the required gross margin.
Expected scrap means more parts may need to be started than the customer will buy. That increases expected run time and any material or subcontract cost incurred for each started part without increasing customer revenue.
No. A machine rate converts allocated annual machine costs into a productive-hour cost. A job price also depends on quantity, setup, cycle time, material, scrap, subcontracting, additional labour, job-specific risk, and target margin.
Markup divides profit by cost, while gross margin divides profit by selling price. To achieve a 25% gross margin, divide estimated cost by 0.75 rather than adding 25% to cost.
No. It is a planning estimate based on the assumptions entered. A competent person must still verify manufacturability, process, quality, capacity, delivery, commercial terms, and the final price offered to the customer.
Verify process selection, setup and cycle assumptions, material yield, quality and inspection requirements, regulatory obligations, capacity and delivery, commercial terms, and the final price offered to the customer. The calculator cannot account for every technical or commercial risk.
Discuss job costing and margin control