Automotive component costing: machine build economics, inverted by volume

The build-up matches machinery manufacturing: an assembly of made parts, bought parts and subcontracted parts. Read that guide first — the three-way split and the double-count trap when you supply material to a subcontractor both apply unchanged.

What differs is volume, and it reverses which categories matter.

One-time cost sinks, but does not disappear

Tooling, fixtures and design spread over program-lifetime volume, so the per-unit share becomes small. That tempts people to leave the field empty altogether, and that is the error.

Why it must be entered anyway: if the program ends earlier than planned, the unrecovered balance is a real loss. An entered figure can be recalculated; an empty field means nobody knows how much is still outstanding.

Cost of quality becomes a major category

At low volume, inspection is a few minutes of the operator's time. At high volume with very low defect targets, it becomes a block of its own:

• 100% or sampled inspection — labor, or gauge and machine time.
• Records and lot traceability — clerical time, plus retention cost.
• Retained samples and periodic destructive testing — product made that is never sold.

The third is the one most often missed, because it looks like ordinary production. It is product with no revenue, so it behaves like scrap — record it there, noting the cause is retained sampling rather than a defect.

Three changes from the machinery guide

The remaining seven follow the machinery guide.