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Job Shop Quote Price, Margin and Markup Calculator

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.

Your numbers

Quantity ordered

parts

Material per part

Outside processing per part

Anodize, heat treat, plating, per good part.

Run time per part

min

Setup time per lot

hours

Shop rate (machine + labor + overhead)

$/hour

Expected scrap

Target gross margin

25 %

Your results

Quote price per part

$55

Price = cost / (1 - margin).

Equivalent markup on cost

33.3%

Parts to start to ship the order

Scrap inflates material and run time.

Material cost

$754

Run cost

$906

Setup cost

$238

Outside processing

$160

Total cost

$2,057

Cost per part

$41

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

Save results:

Unit price and cost vs order quantity

Sweeps Quantity ordered from 1 to 200, holding your other inputs fixed.

Check quotes against actual job cost

Optional: see where your estimates drift from actuals in your ERP data.

Optional. The tool and every export work without this. No spam.

How to use it

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

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.

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

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.

Frequently Asked Questions

Which margin should I target?

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?

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?

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?

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

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

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