# Cost Per Good Part Calculator

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

## Short answer

Build a cost per good part from labor, burden, machine rate, setup, material and scrap, and see how efficiency changes it.

## Category

cost-finance

## Erp

Plex Smart Manufacturing Platform

## Industry

Discrete Manufacturing

## Audience

- Cost accountant
- Manufacturing engineer
- Estimator

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Operator wage per hour

**Key:** wage

**Type:** number

**Default:** 24

**Min:** 0

**Step:** 0.5

**Unit:** $

#### Fringe and labor burden

**Key:** burden_pct

**Type:** number

**Default:** 35

**Min:** 0

**Max:** 100

**Step:** 1

**Unit:** %

#### Operators per machine

**Key:** operators

**Type:** number

**Default:** 1.5

**Min:** 0

**Step:** 0.25

**Unit:** people

**Help:** Use a fraction if one operator tends several machines.

#### Machine hour rate

**Key:** machine_rate

**Type:** number

**Default:** 38

**Min:** 0

**Step:** 1

**Unit:** $ per hour

**Help:** Depreciation, power, tooling, maintenance and floor space.

#### Standard cycle time

**Key:** cycle_sec

**Type:** number

**Default:** 40

**Min:** 1

**Step:** 1

**Unit:** seconds per part

#### Efficiency

**Key:** eff

**Type:** slider

**Default:** 85

**Min:** 40

**Max:** 100

**Step:** 1

**Unit:** %

#### Scrap rate

**Key:** scrap_pct

**Type:** number

**Default:** 3

**Min:** 0

**Max:** 50

**Step:** 0.5

**Unit:** %

#### Material per part

**Key:** material

**Type:** number

**Default:** 4.2

**Min:** 0

**Step:** 0.1

**Unit:** $

#### Setup cost per job

**Key:** setup_cost

**Type:** number

**Default:** 180

**Min:** 0

**Step:** 10

**Unit:** $

#### Lot size

**Key:** lot

**Type:** number

**Default:** 500

**Min:** 1

**Step:** 25

**Unit:** parts

**Outputs:**

#### Parts per hour

**Key:** parts_hr

**Expr:** 3600 / cycle_sec * eff / 100

**Format:** decimal

#### Labor cost per machine hour

**Key:** labor_hr

**Expr:** wage * (1 + burden_pct / 100) * operators

**Format:** currency

#### Conversion cost per part

**Key:** conv

**Expr:** (labor_hr + machine_rate) / parts_hr

**Format:** currency

**Description:** Labor plus machine cost per part made.

#### Setup cost per part

**Key:** setup_part

**Expr:** setup_cost / lot

**Format:** currency

#### Cost per good part

**Key:** cost_good

**Expr:** (material + conv + setup_part) / (1 - scrap_pct / 100)

**Format:** currency

**Primary:** true

**Description:** Spreads the cost of scrapped parts over the good ones.

#### Scrap cost carried per good part

**Key:** scrap_cost

**Expr:** cost_good - (material + conv + setup_part)

**Format:** currency

**Primary:** true

**Chart:**

#### Cost per good part vs efficiency

**Type:** line

**X:** eff

**From:** 40

**To:** 100

**Steps:** 31

**Series:**

- cost_good
- conv

**Disclaimer:** Simplified cost model. Apply your own overhead allocation rules and check the scrap treatment against your costing policy.

## Content

**Intro:** Part cost is where quoting, scheduling and improvement priorities meet. This calculator builds a cost per good part bottom-up so you can see what efficiency and scrap are really worth.

**Sections:**

#### How to use it

**Body:** Enter the operator wage, burden and the number of operators per machine, then the machine hour rate from your costing. Add the standard cycle time and the efficiency you actually achieve, then scrap rate, material per part, setup cost and lot size. The output is the conversion cost per part and the cost per good part with scrap loaded in. Drag the efficiency slider to see how much each point of efficiency is worth, which is useful when justifying a fixture or training.

**Bullets:**

- Use actual efficiency from production data
- Keep the machine rate consistent with your cost system
- Include fringe and payroll taxes in burden
- Test a small lot to see setup impact

#### The build-up

**Body:** Parts per hour equal 3600 divided by cycle time, times efficiency. Labor cost per machine hour is wage times one plus burden, times operators. Conversion cost per part is labor plus machine rate, divided by parts per hour. Setup per part is setup cost over lot size. Cost per good part is material plus conversion plus setup, divided by the good fraction, which loads scrap cost, including material, onto the parts shipped.

#### Reading the result

**Body:** Because conversion cost divides by parts per hour, cost per part rises sharply as efficiency falls, and the chart curves upward at the left. A few points of scrap on a part with expensive material can outweigh a larger efficiency gain. Compare the scrap cost line with your quality improvement budget: if scrap adds several cents to each part, you can price a corrective project directly. Also compare the result with the quoted price to see the margin left.

#### Common mistakes

**Body:** Using standard instead of actual efficiency produces a cost that is too low for the shop to hit. Applying scrap only to conversion and not material understates the loss. Forgetting setup on small lots hides why short runs are unprofitable. Missing overhead such as quality, supervision and facility cost is also common; add it through the machine rate or as a separate allocation, and keep the method the same across quotes.

**Cta:** Netray can help compare standard and actual part cost from your ERP data and explain variances in plain language. Ask if you want to see how.

**Faq:**

#### Is machine hour rate the same as overhead?

**Answer:** Not exactly. A machine hour rate usually bundles depreciation, power, maintenance and tooling for that machine. Plant overhead such as supervision and facilities may be added separately, depending on your costing policy.

#### Why divide by the good fraction?

**Answer:** Scrapped parts consume material and time but earn no revenue. Dividing by the good fraction moves their cost onto the good parts, which is the true cost of what you ship.

#### How does lot size affect cost?

**Answer:** Setup cost is fixed per job, so larger lots spread it thinner. Doubling a 250-part lot cuts setup cost per part in half, which is why small orders carry a premium.

#### Can I use this for quoting?

**Answer:** It is a good cross-check. Add your overhead, profit and any tooling or packaging separately, and compare against what your ERP costing returns for the same routing.

## Search terms

cost per part calculator, manufacturing cost per part, cost per good part, machine hour rate calculator, scrap cost calculator, part costing worksheet, labor and burden per part, Plex part cost

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