Calculate manufacturing cost per unit from raw material, labour, and overhead. Use it for a batch or a single order before you lock a quote. Factory OS, if you later track the same costs on live orders, is ₹2,999/month.
Raw materials
Rs. 3960.00
Labor
Rs. 1200.00
Overheads
Rs. 910.00
Grand total
Rs. 6070.00
Start with core materials, bought-out parts, and consumables used in this production run.
Total
Rs. 3250.00
Total
Rs. 560.00
Total
Rs. 150.00
| Material | Quantity | Unit cost | Total | Action |
|---|---|---|---|---|
| Rs. 3250.00 | ||||
| Rs. 560.00 | ||||
| Rs. 150.00 |
Capture direct labor hours for operators, inspectors, supervisors, and other process owners.
Total
Rs. 960.00
Total
Rs. 240.00
| Labor type | Quantity | Unit cost | Total | Action |
|---|---|---|---|---|
| Rs. 960.00 | ||||
| Rs. 240.00 |
Include utilities, packaging, transport, maintenance, and other job-level overheads.
Total
Rs. 160.00
Total
Rs. 500.00
Total
Rs. 250.00
| Overhead | Quantity | Unit cost | Total | Action |
|---|---|---|---|---|
| Rs. 160.00 | ||||
| Rs. 500.00 | ||||
| Rs. 250.00 |
A one-time cost estimate is useful — but manufacturers who track actual production costs continuously (material issue, labour, overhead, scrap, rework) get far more accurate numbers from their live data. FactoStack tracks all of this automatically as orders are produced.
Manufacturing cost per unit is the batch total divided by saleable units. The batch total is raw material plus direct labour plus manufacturing overhead.
Cost per unit = (raw material + direct labour + manufacturing overhead) ÷ saleable units
A job shop plans a batch of 100 brackets and expects 4 pieces to be scrapped, so 96 units can be sold.
| Cost | Working | Amount |
|---|---|---|
| Raw material | 120 kg sheet × ₹85 | ₹10,200 |
| Direct labour | 8 hours × ₹250 | ₹2,000 |
| Manufacturing overhead | Machine time and power for the batch | ₹1,500 |
| Batch total | 10,200 + 2,000 + 1,500 | ₹13,700 |
| Cost per unit | ₹13,700 ÷ 96 saleable units | ₹142.71 |
Enter the same lines in the calculator above to test a different scrap rate or margin. This example is a costing sketch, not a customer result.
Scrap and process loss do not reduce what you spent. The material is bought, the labour is paid, the machine ran. Only the number of units you can sell goes down, so each saleable unit carries more cost.
In the bracket example above, dividing ₹13,700 by 100 units started gives ₹137.00. Dividing by the 96 saleable units gives ₹142.71. If you price from the first number, every bracket sells about ₹5.71 below cost before margin. For the full method, read our guide on how to calculate manufacturing cost per unit.
A small food unit grinds and packs a spice blend. It starts with 500 kg of raw spices. Cleaning and grinding lose 6%, leaving 470 kg, packed into 500 g pouches: 940 pouches.
| Cost | Working | Amount |
|---|---|---|
| Raw spices (BOM input) | 500 kg × ₹180 | ₹90,000 |
| Pouches and labels | 940 × ₹4 | ₹3,760 |
| Direct labour | 24 labour-hours × ₹70 | ₹1,680 |
| Manufacturing overhead | Power, grinder time, sealing | ₹2,500 |
| Batch total | 90,000 + 3,760 + 1,680 + 2,500 | ₹97,940 |
| Cost per kg saleable | ₹97,940 ÷ 470 kg | ₹208.38 |
| Cost per 500 g pouch | ₹97,940 ÷ 940 pouches | ₹104.19 |
Dividing by the 500 kg started would show ₹195.88 per kg, about ₹12.50 too low. In the calculator, enter 940 as the batch size. This is a costing sketch with illustrative rates, not a customer result.
A garment unit cuts and stitches 200 shirts. After QC, 6 are rejected, so 194 are saleable.
| Cost | Working | Amount |
|---|---|---|
| Fabric | 320 m (1.6 m per shirt incl. cutting waste) × ₹220 | ₹70,400 |
| Trims (thread, buttons, labels) | 200 × ₹18 | ₹3,600 |
| Cutting labour | 200 × ₹6 | ₹1,200 |
| Stitching labour | 200 × ₹55 | ₹11,000 |
| Finishing and packing | 200 × ₹10 | ₹2,000 |
| Manufacturing overhead | Power, machine upkeep, supervision | ₹3,000 |
| Batch total | 70,400 + 3,600 + 1,200 + 11,000 + 2,000 + 3,000 | ₹91,200 |
| Cost per saleable shirt | ₹91,200 ÷ 194 | ₹470.10 |
Dividing by 200 shirts would show ₹456.00, so six rejects hide about ₹14 per shirt. This is a costing sketch with illustrative rates, not a customer result. To turn the cost into a price, use our free quotation generator.
The calculator is a planning sketch. You type in expected quantities, rates, and scrap. It does not know what the shop floor actually used. Real cost per unit comes from actuals: material issued against each production order, labour booked to the job, and scrap recorded when it happens.
Factory OS (₹2,999/month) records those against production orders and BOMs, so you compare planned and actual cost. See production planning and MRP, inventory management, and pricing.
This free tool estimates the cost to produce a batch — raw material, labour, and overhead — then shows the manufacturing cost per unit. Factory OS is ₹2,999/month when you want those costs recorded on live production orders.
Add raw material, direct labour, and manufacturing overhead for the batch, then divide by the number of saleable units after scrap and process loss. Dividing by units started instead of units sold makes cost per unit look lower than it is. The worked examples below show the same batch both ways, and our full guide covers the method in detail.
A complete production cost estimate combines raw materials, direct labour, production overheads, packaging or job-level expenses, and the number of saleable units produced.
Multiply each material quantity by its unit purchase cost, then add every material line used for the batch. Use a consistent unit of measure for each quantity and rate.
Allocate utilities, machine time, rent, maintenance, supervision, and other indirect costs using a consistent batch, machine-hour, labour-hour, or percentage basis.
They answer the same question on this page: batch cost and cost per unit from material, labour, and overhead. Use the worked example below if you want the formula written out.
Scrap does not remove cost, it removes saleable units. The batch spends the same material, labour, and overhead, but fewer units carry that cost, so cost per unit goes up. For food and process batches, use saleable output (for example kg after cleaning loss) as the divisor.
Total manufacturing cost is the batch total: raw material, direct labour, and overhead. Cost per unit is that total divided by saleable units. The calculator shows both, so you can check the batch total against your purchase and wage records.
The calculator adds a target gross margin to the estimated production cost so you can test a selling price before confirming a quotation.
