Scrap Rate Cost Calculator

Calculate scrap rate percentages, sunk material and machining losses, and net scrap burden per good unit produced.

Scrap Rate & Quality Defect Financial Impact

Net Scrap Cost
—
financial loss
Scrap Rate
—%
Defects / Total Produced
Burden per Good Unit
—
scrap cost / good unit
Gross Scrap Loss
—
before salvage offset

Scrap Rate Formula

Scrap Rate (%) = (Scrap Units ÷ Total Units Produced) × 100
  • Sunk Costs: Scrapped units consume both raw material and invested operator/machine time.
  • Net Scrap Loss = Scrap Units × (Raw Material + Sunk Processing Cost - Recycling Credit).

Step-by-Step Worked Example

Scenario: Machining 2,000 automotive cast housings with 80 scrapped parts

Calculation Steps:

  1. Scrap Rate = (80 / 2,000) × 100 = 4.0%
  2. Good Units = 2,000 - 80 = 1,920 parts
  3. Cost Per Scrapped Part = $15 + $10 = $25.00 ($2,000 gross)
  4. Recycling Credit = 80 × $2.00 = $160
  5. Net Scrap Loss = $2,000 - $160 = $1,840
  6. Scrap Burden Per Good Part = $1,840 / 1,920 = $0.96 / good part
Result: Scrap rate is 4.0% (80 parts), generating a net financial loss of $1,840 ($0.96 penalty added to each good part).

How to Use This Calculator

  1. 1Enter total units produced and number of rejected scrap units.
  2. 2Input the raw material cost per part.
  3. 3Add sunk processing labor and machine time invested before rejection.
  4. 4Optionally specify scrap metal or resin resale recycling credit.

Assumptions & Limitations

  • Scrap parts cannot be reworked economically.
  • Sunk processing cost reflects average stage of failure on the line.

Frequently Asked Questions

What is the difference between scrap and rework?

Scrap refers to defective parts that cannot be salvaged and must be discarded or recycled. Rework refers to non-conforming parts that can be brought into specification with additional labor and machining.

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