# Setup Cost Per Piece Calculator

> Source: https://netray.co/tools/job-shop-setup-cost-per-piece-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

See how setup hours, run time, material and margin combine into a per-piece cost and price, and how it falls as the lot size grows.

## Category

cost-finance

## Industry

Machine Shops

## Audience

- Estimator
- Shop owner
- Sales engineer

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Setup time

**Key:** setup_hours

**Type:** number

**Default:** 3

**Min:** 0

**Step:** 0.25

**Unit:** hours

**Help:** Total setup including programming proof and first piece.

#### Setup rate

**Key:** setup_rate

**Type:** number

**Default:** 90

**Min:** 0

**Step:** 5

**Unit:** per hour

#### Lot size

**Key:** lot_size

**Type:** number

**Default:** 50

**Min:** 1

**Step:** 1

**Unit:** pieces

#### Run time per piece

**Key:** run_min

**Type:** number

**Default:** 12

**Min:** 0

**Step:** 0.5

**Unit:** minutes

#### Run rate

**Key:** run_rate

**Type:** number

**Default:** 85

**Min:** 0

**Step:** 5

**Unit:** per hour

#### Material and outside cost per piece

**Key:** material

**Type:** number

**Default:** 14.5

**Min:** 0

**Step:** 0.25

#### Target margin on price

**Key:** margin

**Type:** slider

**Default:** 25

**Min:** 0

**Max:** 60

**Step:** 1

**Unit:** percent

**Outputs:**

#### Total setup cost

**Key:** setup_cost

**Expr:** setup_hours * setup_rate

**Format:** currency

#### Setup cost per piece

**Key:** setup_pc

**Expr:** setup_cost / lot_size

**Format:** currency

#### Run cost per piece

**Key:** run_pc

**Expr:** run_min / 60 * run_rate

**Format:** currency

#### Cost per piece

**Key:** cost_pc

**Expr:** setup_pc + run_pc + material

**Format:** currency

**Primary:** true

#### Price per piece at target margin

**Key:** price_pc

**Expr:** cost_pc / (1 - margin / 100)

**Format:** currency

**Primary:** true

**Description:** Cost divided by one minus margin, so margin is a share of price.

#### Total lot price

**Key:** lot_price

**Expr:** price_pc * lot_size

**Format:** currency

**Chart:**

#### Cost and price per piece versus lot size

**Type:** line

**X:** lot_size

**From:** 1

**To:** 500

**Steps:** 40

**Series:**

- cost_pc
- price_pc

**Disclaimer:** Use your own shop rates. This is an estimating aid and does not include scrap allowance, packaging, freight or tooling consumption unless you add them to material and outside cost.

## Content

**Intro:** Setup is a fixed cost, so the price per piece depends heavily on lot size. This calculator spreads setup across the lot, adds run time and material, applies a margin to price and charts how the unit price falls as quantity grows.

**Sections:**

#### How to use the calculator

**Body:** Enter setup hours and rate, the lot size, the run time per piece and run rate, plus material and outside cost per piece. Set the margin you want on price. The results show setup cost per piece, run cost, total cost per piece, and the price needed to hit the margin. The chart sweeps lot size from 1 to 500 so you can set quantity break prices for the customer.

#### The formulas

**Body:** Setup cost per piece equals setup hours times setup rate divided by lot size. Run cost per piece equals run minutes divided by 60 times run rate. Cost per piece is setup plus run plus material. Price equals cost divided by one minus margin percent, so a 25 percent margin means profit is a quarter of the selling price, not a quarter on top of cost.

**Bullets:**

- Margin on price is lower than markup on cost
- Setup per piece falls in proportion to lot size
- Run and material cost per piece stay constant
- Add scrap allowance to material for risky parts

#### Reading the chart

**Body:** At very small lots the curve is steep because setup dominates. As lot size grows the curve flattens toward the floor set by run time and material. The flat region tells you the lot size at which extra quantity stops buying much price reduction. Use it when a customer asks for a price at 10, 50 and 250.

#### ERP and quoting notes

**Body:** JobBOSS, E2 Shop System, Global Shop Solutions and ProShop all quote with setup and run times by operation. This calculator is a quick sanity check on a single operation set. If the ERP quote and this result disagree, look at burden rates, scrap factors and whether setup is split by operation.

**Cta:** If you want quotes and quantity breaks suggested from your own routing history, Netray can help build that with your ERP data.

**Faq:**

#### What is the difference between margin and markup?

**Answer:** Markup is profit as a share of cost. Margin is profit as a share of price. A 25 percent margin requires a 33 percent markup on cost. This calculator uses margin on price.

#### Should I include programming time in setup?

**Answer:** If programming is a one-time cost for the part, include it in setup for a first order and consider a reduced amount for repeat orders. Be clear with the customer about which applies.

#### Does it include scrap?

**Answer:** Not directly. Add a scrap allowance to the material and outside cost per piece or increase the run time slightly. For risky parts, a scrap factor of a few percent is common.

#### Can I use different rates for setup and run?

**Answer:** Yes. The calculator has separate setup and run rates because many shops charge setup at a different rate or use different work centers.

## Search terms

setup cost per piece calculator, machine shop quantity break pricing, setup amortization calculator, price per piece cnc machining, lot size pricing calculator, quantity discount machining

---
Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json