# Job Shop Quote Price, Margin and Markup Calculator

> Source: https://netray.co/tools/job-shop-quote-price-margin-and-markup-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Turn cost inputs into a unit price at your target gross margin, including scrap, setup and outside processing, and see the markup it equals.

## Category

cost-finance

## Industry

Job Shop Machining

## Audience

- Estimator
- Shop owner
- Sales engineer

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Quantity ordered

**Key:** qty

**Type:** number

**Default:** 50

**Min:** 1

**Step:** 1

**Unit:** parts

#### Material per part

**Key:** material

**Type:** number

**Default:** 14.5

**Min:** 0

**Step:** 0.25

**Unit:** $

#### Outside processing per part

**Key:** outside

**Type:** number

**Default:** 3.2

**Min:** 0

**Step:** 0.1

**Unit:** $

**Help:** Anodize, heat treat, plating, per good part.

#### Run time per part

**Key:** run_min

**Type:** number

**Default:** 11

**Min:** 0

**Step:** 0.5

**Unit:** min

#### Setup time per lot

**Key:** setup_hr

**Type:** number

**Default:** 2.5

**Min:** 0

**Step:** 0.25

**Unit:** hours

#### Shop rate (machine + labor + overhead)

**Key:** rate

**Type:** number

**Default:** 95

**Min:** 0

**Step:** 1

**Unit:** $/hour

#### Expected scrap

**Key:** scrap

**Type:** number

**Default:** 3

**Min:** 0

**Max:** 40

**Step:** 0.5

**Unit:** %

#### Target gross margin

**Key:** margin

**Type:** slider

**Default:** 25

**Min:** 5

**Max:** 60

**Step:** 1

**Unit:** %

**Outputs:**

#### Parts to start to ship the order

**Key:** make_qty

**Expr:** ceil(qty / (1 - scrap / 100))

**Format:** integer

**Description:** Scrap inflates material and run time.

#### Material cost

**Key:** mat_total

**Expr:** material * make_qty

**Format:** currency

#### Run cost

**Key:** run_total

**Expr:** run_min / 60 * rate * make_qty

**Format:** currency

#### Setup cost

**Key:** setup_total

**Expr:** setup_hr * rate

**Format:** currency

#### Outside processing

**Key:** out_total

**Expr:** outside * qty

**Format:** currency

#### Total cost

**Key:** cost_total

**Expr:** mat_total + run_total + setup_total + out_total

**Format:** currency

#### Cost per part

**Key:** unit_cost

**Expr:** cost_total / qty

**Format:** currency

#### Quote price per part

**Key:** unit_price

**Expr:** cost_total / (1 - margin / 100) / qty

**Format:** currency

**Primary:** true

**Description:** Price = cost / (1 - margin).

#### Equivalent markup on cost

**Key:** markup

**Expr:** (unit_price / unit_cost - 1) * 100

**Format:** percent

**Primary:** true

**Chart:**

#### Unit price and cost vs order quantity

**Type:** line

**X:** qty

**From:** 1

**To:** 200

**Steps:** 40

**Series:**

- unit_price
- unit_cost

**Disclaimer:** Estimating aid only. Add freight, tooling, inspection or packaging lines that apply to your job.

## Content

**Intro:** Margin and markup are not the same number, and confusing them is one of the commonest ways a job shop underprices work. This calculator prices a part from cost, then shows the markup that your target margin really requires.

**Sections:**

#### How to use it

**Body:** Enter the order quantity, material, outside processing, run minutes, setup hours and the all-in shop rate. Set expected scrap and the gross margin you want. The result is the price per part and the equivalent markup. Slide the margin to see what a discount costs you, and read the chart to see how setup amortizes as quantity grows.

#### Margin versus markup

**Body:** Margin is profit as a share of price. Markup is profit as a share of cost. A 25% margin needs a 33.3% markup, and a 40% margin needs 66.7%. If you add 25% to cost thinking it is a 25% margin, you actually earn 20%. The calculator divides cost by one minus the margin, which is the correct form.

**Bullets:**

- Price = cost / (1 - margin)
- Markup = margin / (1 - margin)
- Scrap raises started quantity, not just cost
- Setup is a lot cost, so small orders carry more per part

#### Common mistakes and ERP notes

**Body:** Shops often apply scrap to material only, forget that scrap also burns run time, or quote setup at zero for repeat work. In JobBOSS, E2 Shop System or Global Shop Solutions, make sure the quote module uses the same shop rate as job costing, otherwise estimates and actuals will never reconcile. Compare each finished job to its quote and adjust run times where you were consistently low.

**Cta:** If you want quotes checked against actual job cost history in your ERP, Netray can build that comparison for you.

**Faq:**

#### Which margin should I target?

**Answer:** It depends on your overhead and market. Many job shops aim for a gross margin on the job in the 25% to 40% range, but the right number is the one that covers overhead and leaves a profit at your volume.

#### Why does scrap use division?

**Answer:** To ship 50 good parts at 3% scrap you must start more than 50. Starting qty = good qty / (1 - scrap). Multiplying by 1.03 slightly understates it.

#### Is setup charged to the customer once?

**Answer:** Setup is a one-time lot cost, so it is spread across the quantity in the quoted unit price. Some shops show it as a separate NRE line instead; the total is the same.

#### Can I use this for repeat orders?

**Answer:** Yes. Lower the setup hours if you have proven programs and fixtures, and use actual run times from past jobs rather than estimates.

## Search terms

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