Product Cost Rollup Calculator: Build a True Standard Unit Cost
This free product cost rollup calculator builds a defensible standard unit cost for cost accountants, manufacturing engineers, and controllers running Infor SyteLine, Infor LN, Baan, or M3. Enter material, routing labor, your overhead absorption rate, machine time, and expected scrap, and the tool shows how each element stacks into a full absorbed cost per good unit shipped. It mirrors what an ERP cost rollup does behind the scenes, so you can sanity-check a suspicious item cost, model a routing change, or quantify how much scrap is silently inflating every part number you sell.
Your numbers
Total rolled-up material from every BOM level, at current standard or last cost.
Sum of run labor across all routing operations, excluding setup amortization.
Wage plus payroll taxes and benefits. Use the labor burden calculator if you are unsure.
Plant overhead applied as a percentage of direct labor dollars. Pick the profile closest to your operation.
Machine run time charged separately from labor when operators tend multiple machines.
Depreciation, maintenance, energy, and floor space per machine hour.
Percentage of started units that never ship. Drives the yield gross-up on every cost element.
Your results
Estimates only. Actual ERP cost rollups also include setup amortization, subcontract operations, and lower-level yield compounding. Validate against your item cost records before repricing.
Get your full cost rollup breakdown
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How the rollup math works
A cost rollup layers four buckets and then grosses the total up for yield. Direct labor is routing run hours times a burdened rate, so 1.5 hours at $32 gives $48. Overhead is applied on that labor base, so a 145% machine-shop rate adds $69.60. Machine cost is tracked separately because one operator often runs several machines, and 0.8 hours at $65 adds $52. Add $42 of material and the base cost is $211.60. Finally, because 3% of started units never ship, the good units must absorb the failures: dividing by 0.97 lifts the standard to $218.14. That $6.54 gap is scrap that never appears on a variance report as scrap.
Overhead rates used in this tool
The overhead profiles in the selector reflect the absorption rates we see most often across discrete manufacturers running SyteLine, Infor LN, and M3. Capital intensity drives the number far more than company size does, which is why a fifteen-person aerospace machining cell can carry a heavier rate than a two-hundred-person assembly plant. Use these figures as sanity checks against your own calculated rate rather than as substitutes for it, and remember that any single plant-wide rate almost always over-costs labor-heavy parts and under-costs machine-heavy ones. If your parts mix spans both extremes, the profile you pick here will shift individual item costs by twenty percent or more in either direction.
- 95% is typical for light assembly and kitting operations with minimal equipment.
- 145% is the common range for a general machine shop with mixed CNC and manual work.
- 210% reflects precision aerospace machining with 5-axis equipment, tooling, and inspection burden.
- 275% and above appears in high-automation electronics where equipment cost dominates labor.
Reading your result before you reprice anything
Start with the ratio of overhead to material. If overhead exceeds 40% of the rolled cost, your pricing is highly sensitive to volume assumptions, because absorption rates are set on forecast hours that rarely materialize exactly. Next, look at the scrap cost line. Anything above 3% of rolled cost usually means the routing standard is stale or a specific operation is failing, and the fix is cheaper than a price increase. Finally, compare the rolled cost to your item master standard in the ERP. Gaps larger than 10% usually trace to routing times that were set at launch and never revisited after process improvements.
How Netray helps you fix costing at the source
Bad standard costs are almost never a formula problem. They come from routings nobody has touched in five years, overhead rates set on last decade's volumes, and scrap that gets backflushed silently. Netray audits item costs inside SyteLine, LN, and M3, rebuilds routing standards using actual shop floor run times, and puts multi-rate overhead structures in place so machine-heavy and labor-heavy parts stop cross-subsidizing each other. We then deploy on-prem AI that flags item costs drifting away from actuals every month, inside your firewall so ITAR and CMMC obligations are never at risk.
Frequently Asked Questions
Why does my ERP standard cost differ from this calculator?
Most gaps come from three places. Your ERP compounds yield loss at every BOM level, so multi-level assemblies gross up more than a single-level calculation. It also amortizes setup across a specific lot size, which this tool leaves out. And many systems apply several overhead rates by work center rather than one plant rate. Treat the calculator as a fast sanity check, then investigate any variance larger than about 10%.
Should overhead be applied on labor hours or machine hours?
Apply it on whichever driver actually consumes the overhead. Labor-based absorption made sense when labor dominated cost, but in a CNC shop where one operator tends four machines, labor-based rates badly under-cost machine-heavy parts and over-cost assembly work. Most discrete manufacturers we work with move to dual rates: a labor pool for supervision and fringe, and a machine pool for depreciation, maintenance, tooling, and energy.
How often should we run a full cost rollup?
Roll standards at least annually as part of the budget cycle, and re-roll immediately after any material price change over roughly 5%, any routing revision, or any change in overhead absorption rates. High-volatility categories such as electronic components or specialty alloys warrant quarterly rolls. What matters more than frequency is discipline: freeze the standard, measure variance against it, and investigate the variance rather than quietly adjusting the standard to hide it.
Get a personalized cost rollup review and a prioritized list of the item costs distorting your margins from Netray's ERP costing specialists.
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