Costing a machine build: roll up from parts, do not divide down from hours

Every trade covered so far costs **one thing moving through a sequence of machines**. This one does not. The product is an assembly of dozens or hundreds of parts, each with its own route, and a large share of it you did not make at all.

So the direction of the calculation reverses: you **roll up from the parts**, rather than dividing machine hours down onto a product.

Split the parts three ways before costing anything

The ten categories

1. Material

Two very different halves. Stock for in-house parts, taken as issued rather than as finished weight. And bought-out parts at purchase price — usually the **largest** single share of a machine, and the one most often understated because it arrives across many small orders.

Leaving the sheet blank because the small items have not been added up yet is how a cost comes out plausible and wrong. Fasteners, cable and fittings on a machine are not a rounding error.

2. Machine time

In-house parts only. Bought-out and subcontracted parts consume none of your machine capacity.

3. Labor — three separate blocks

1. Fabrication of in-house parts.
2. Mechanical assembly — build hours on the bench.
3. Wiring, piping and commissioning, usually a different trade at a different rate.

4. Tooling

Cutters and consumables for in-house parts, divided by parts between changes. Fixtures built specially for this machine are **not** here — they are non-recurring, and they have their own guide.

5. Scrap

One scrapped part stops a whole machine shipping, because a machine missing one part is not a machine. So scrap here carries a delay consequence beyond its material value — note that in your verification text even though it has no field of its own.

6. Rework

Two kinds, and they differ by an order of magnitude: fixing a part before assembly, and fixing one after the machine is built and has to be taken apart again. The second is the one that gets left off the sheet.

7. Outside processing

Heat treat, plating, painting, casting, laser cutting. Vendor price per lot divided by pieces, plus transport both ways, plus any pieces they damage that you carry.

8. Commissioning and acceptance testing

An operation the other trades barely have and this one cannot ship without: the machine has to run before it leaves.

That consumes engineer time, energy, consumables, and test material if the machine has to make real parts to prove itself. There is no dedicated field, so enter it under labor and material — but **say so in the verification notes**, or a reader will think you overspent on consumables.

9. Packing and shipping

Crating, sometimes dismantling for transport and reassembly on site. The dismantle-and-rebuild time is **labor**, not freight — record it as such and note why.

10. Plant overhead

Space, power, supervision, stores. Allocating on machine hours misleads in this trade, because a machine spends most of its life on an assembly bench rather than in a machine. Allocating on **total labor hours** usually tracks reality better.

Three checks

1. Subcontracted parts you supplied material for are two lines, not one and a half.
2. Fabrication labor and assembly labor are separate.
3. Non-recurring cost is handled separately — see the next guide, this is where this trade loses money.