KEVOS® MAKEOS · Money
Machine Rate Quote Check (Hour Rate, Job Cost, Margin)
What does an hour on this machine really cost, what does this job cost per part at that rate, and does my quoted price give the margin I need?
Check of a quoted part price against the true cost of the machine: capital recovery from price, resale value, life and interest, with floor space, maintenance, power and tooling per productive hour, plus the operator (as the machine hour rate tool); the job hours from set-up and cycle time, the job cost with material, cost per part, margin at the quoted price and the least price for the margin you want.
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How this tool works
Inputs, units and where to find them
| Input | Unit | Typical source |
|---|---|---|
| Machine | ||
| Installed machine cost | AUD | Cost of the machine installed and commissioned. |
| Resale value at end of life | AUD | Expected resale value at the end of its life. |
| Economic life | years | Years over which the machine must pay for itself. |
| Interest (discount) rate | % | Interest or required return on capital. |
| Productive hours per year | h | Hours per year the machine actually makes parts. |
| Floor space cost per year | AUD/yr | Cost per year of the floor space it occupies. |
| Average power drawn when running | kW | Average electrical power while running. |
| Electricity price | AUD/kWh | Electricity price. |
| Maintenance per year | AUD/yr | Maintenance and repairs per year. |
| Tooling and consumables per hour | AUD/h | Tooling and consumables per running hour. |
| Operator cost per hour (fully loaded) | AUD/h | Fully loaded cost of the operator per hour. |
| Job | ||
| Set-up time | h | Set-up time for the job. |
| Cycle time per part | min | Machine cycle time per part, including load and unload. |
| Quantity | Number of parts in the job. | |
| Material and bought-in cost per part | AUD | Material and bought-in items per part. |
| Quoted price per part | AUD | Price per part you intend to quote. |
| Margin wanted | % | Margin on price you need. |
Method and formulas
- Capital recovery = (price − resale) × A/P + resale × i; machine rate = (capital + space + maintenance) ÷ hours + power + tooling; total = machine + operator (as the machine hour rate tool).
- Job hours = set-up + quantity × cycle ÷ 60; job cost = hours × total rate + quantity × material; cost per part = job cost ÷ quantity.
- Margin = (quote − cost per part) ÷ quote; least price = cost per part ÷ (1 − margin wanted).
- Example: the machine costs 105.9 AUD/h with its operator; the job costs 17.208 AUD a part, so 22 AUD gives 21.78% margin.
Limitations
- General overheads beyond the machine (sales, admin, profit share) are not included unless added to the rates.
- Assumes the productive hours per year are achieved; idle time raises the true rate.
- Example values are illustrations. Replace them with values for your actual task.
Typical uses
- Check a quote before sending it
- Find the least price for a target margin
- Show customers where the hourly rate comes from
Who it is for
- Estimators
- Business owners
- Production managers
What you get
- Machine rate and total hour rate
- Job hours, job cost and cost per part
- Margin and least price
Interpreting the result
- Small batches carry the set-up time: quote set-up separately or set a minimum order.
References
- Machinery’s Handbook, 29th edition (Industrial Press, 2012), printed pp. 134–146, 1153–1160. Topic reference; no source tables or recommended settings are reproduced.
WORKOS tools are screening and decision-support utilities. Verify important financial, engineering, safety, legal or operational decisions using appropriate professional standards and your organisation’s approved data.
Open the Machine Rate Quote Check (Hour Rate, Job Cost, Margin) calculator
