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Standard Cost Build-Up Worksheet for a Manufactured Part

A standard cost is the planned cost of one good unit, built up from material, labor, machine time, outside processing and overhead. This worksheet lets you list every cost line, apply a yield loss to it and see the total per good unit, then export the sheet to Excel for review or upload.

Download:

Cost line	Cost element	Qty or hours per unit	Rate or unit cost	Yield % (%)	Cost per good unit
					$4
					$6
					$0
					$3
					$2
					$3

Standard cost per good unit

$19

Average cost per line

Largest single line

The line to challenge first when the standard looks too high.

Yield % is the share of units that pass. A 94 percent yield on material means you must buy 1 / 0.94 of the quantity per good unit. Set yield to 100 where no loss is expected. Lot-size items such as setup are entered as hours divided by lot size.

Standard cost drift review

Optional: we can compare your ERP standard costs with current purchase prices and routing times and send a list of parts that look out of date.

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

How to use the worksheet

Add one row for each thing that consumes money to make a single unit. Choose the cost element, enter the quantity or hours per unit, the rate or unit cost, and the yield percentage. The cost column divides by yield so that losses are carried by the good units. Edit the example rows, delete what you do not need and export to Excel when the totals look right.

Material: quantity per unit including cut-off, multiplied by unit cost.
Labor and machine: standard hours per unit multiplied by the rate for that work center.
Setup: setup hours divided by the standard lot size.
Subcontract: the processor price per piece or per lot divided by quantity.
Overhead: hours or dollars of the allocation base multiplied by the overhead rate.

The method behind the numbers

Standard costing assigns a fixed planned cost to each item, then compares actual cost against it as variances. Most ERPs roll this up from the bill of materials and routing: lower level cost first, then the operations. This worksheet mirrors that roll-up for a single part so you can check what the ERP should produce. The yield adjustment treats scrap as a cost of the good units, which is how most cost accountants build the standard before the first production order is released.

Reading the result

Look at the total, then the split by element. A part where machine time and overhead dominate is sensitive to the machine hour rate and the overhead base, so errors in those rates move the standard most. A material-heavy part is sensitive to purchase price and scrap. Compare the total against the current price list and the last quote to see if the margin still holds. Review the largest line first, since a ten percent error there matters more than a fifty percent error on a minor line.

Common mistakes

Teams often forget setup time, double count labor inside machine rates, or apply overhead to a base that already includes it. Another frequent error is entering yield as a scrap percentage: a 6 percent scrap rate is a 94 percent yield. Finally, a standard built on last year's rates will produce favorable or unfavorable variances that are really an out-of-date standard, so revisit rates at least once a year or when a major input moves.

Frequently Asked Questions

What is a standard cost build-up?

It is the itemised calculation of the planned cost of one good unit. Each line shows a cost element, the quantity or hours consumed, the rate and any yield loss. The sum is the standard cost used to value inventory and measure variances.

How do I apply scrap to a standard cost?

Divide the line cost by the yield, where yield is the fraction of units that pass. If 6 percent are scrapped, yield is 94 percent and cost rises by about 6.4 percent. This puts the cost of bad units into the good units that ship.

Should setup be in the standard cost?

Yes, if setup is a recurring cost of running the job. Divide setup hours by the standard lot size and charge it at the labor or machine rate. Many shops set lot size at the typical order quantity and review it when order sizes change.

Can I load this into my ERP?

Export to Excel and use it as a reference for the cost fields in your item, BOM and routing records. Most ERPs calculate the roll-up themselves from those records, so use this sheet to verify the ERP result or to model a new part before it exists.

If you want standard cost roll-ups checked against live BOM and routing data in your ERP, we can build a read-only review agent that flags parts whose standard has drifted.

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