Why batch cost matters
Setup time gets amortized differently depending on batch size, which is exactly why a five-piece order and a five-hundred-piece order of the same part can have wildly different costs per part even though the machining itself is identical. Quoting a large batch using a small-batch cost per part, or vice versa, is one of the more common ways a shop leaves money on the table or prices itself out of a job.
How the numbers are calculated
Total batch time is setup time plus the cycle time per part multiplied by the batch quantity. Total batch cost converts that time into dollars using your shop rate, and cost per part divides the total batch cost by the quantity. As batch quantity grows, the fixed setup time gets spread across more parts, so cost per part drops even though nothing about the cutting itself changed.
Practical tips
Run this calculation at a few different batch quantities before quoting a job with an uncertain order size, since the cost per part curve flattens out once quantity gets large enough that setup time becomes a rounding error. For very small batches, setup time can dominate the total cost, which is often the real justification for a minimum order quantity or a setup charge on top of the per-part price.