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How to define the hourly rate of machines for sheet metal working starting from costs calculation


Nowadays it is very important to manage every detail of business to be efficient and reach high performance levels. Often, in sheet metal field, technical equipment includes simple machines or fully automated production lines for sheet metal working such as punching machines, laser cutting, roll forming machines and others.

One of the strategic aspects of the management is to know the exact amount of the costs and evaluate the right payback of the investments.

To define the final hourly rate of the machine you have to analyse 3 main aspects:

Hourly cost of machine: there are six different factors that contribute to the hourly cost of the production system and with a simple formula you can calculate the value for each machine in your workshop.

Sheet metal processing machine costs

Repartition of overhead costs: to achieve a precise result it is helpful to spread the costs that are not directly connected to the production in order to have a balanced repartition of these costs.

(Overhead cost repartition HC) = (Overhead costs) / (Total production area in square meters) * (Machine occupied area in square meters) / (Estimated Hours of operation)

Margin defining: the final step regards perhaps the most delicate aspect of the business management: the price.
Once you have a clear and precise vision of the activity costs and you know the situation of the market, you have the necessary data to define what is the margin you want to apply to your strategy.

(Hourly price) = ((Machine HC) + (Overhead cost repartition HC)) / (100 - Margin%) * 100

Read the full article to deepen in detail how to calculate hourly rate of your sheet metal processing line.

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