Why Machine Hour Rate Matters
A machine hour rate spreads the true cost of owning and running a machine, depreciation, overhead, and power, across the hours it actually produces parts. Without it, quotes tend to either underprice jobs on expensive equipment or overprice jobs on equipment that's already paid for. This calculator builds the rate from the ground up so every dollar of fixed and variable cost is accounted for.
Machine-Only vs Fully Burdened Rate
The machine-only rate answers "what does it cost to run this machine for an hour," independent of who's standing at it. The fully burdened rate adds the operator's pay rate on top, giving the number that should actually go into a quote. Shops that only track machine-only rates often end up under-recovering labor cost on jobs that run unattended versus jobs that need constant operator attention.
Getting Good Numbers In
Useful life and operating hours per year are the two inputs most worth getting right, since both directly divide into the total cost. A machine that only runs 1,000 hours a year carries double the per-hour overhead of one running 2,000 hours, even with identical purchase price and maintenance costs.