Cost Calculation

Forge calculates the cost of each part by combining material, operations, and purchased items. Understanding how these numbers work helps you price your quotes accurately.

How Part Costs Are Calculated

Every part's cost is the sum of three components:

Part Total = Material Cost + Operations Cost + Purchased Items Cost

Each component is calculated separately, then summed to produce the unit cost and total cost for the part.

Material Cost

Material cost depends on the sourcing mode:

  • Inventory — uses the recorded unit cost from your inventory.
  • Saw-Cut — calculates the number of bars needed (accounting for cut length, stock length, and scrap), then multiplies by the cost per bar.
  • Standard Stock — multiplies the stock cost per unit by the number of stock pieces needed.
  • Custom — uses the unit cost you enter directly.

In all modes, the markup percentage is applied after the base cost:

Material Total = Base Material Cost x (1 + Markup% / 100)
Material Unit Cost = Material Total / Quantity

The scrap rate (for Saw-Cut and Standard Stock) increases the amount of material needed before the cost is calculated:

Effective Quantity = Part Quantity x (1 + Scrap Rate% / 100)

If the material is marked as Customer Supplied, its cost is zero.

Operations Cost

Internal Operations

Each internal operation has three time components:

| Component | Type | Calculation | |---------------|----------|-----------------------------------------------| | Programming | Batch | Programming Time x Programming Rate | | Setup | Batch | Setup Time x Setup Rate | | Cycle | Per-unit | Cycle Time x Cycle Rate x Quantity |

Batch costs (programming and setup) are paid once regardless of quantity. Per-unit costs (cycle) scale with the number of parts.

Operation Total = (Setup Cost + Programming Cost) + (Cycle Cost per Unit x Quantity)
Operation Unit Cost = Operation Total / Quantity

Outside Operations

Outside (subcontracted) operations have a simpler calculation:

  • Lot cost type — the estimated cost is a fixed total, not multiplied by quantity.
  • Per-unit cost type — the estimated cost is multiplied by quantity.

In both cases, shipping cost is added, then the markup is applied:

Outside Total = (Base Cost + Shipping) x (1 + Markup% / 100)
Outside Unit Cost = Outside Total / Quantity

Purchased Items Cost

Each purchased item is calculated as:

Item Cost = Item Quantity x Unit Price x (1 + Markup% / 100)

The quantity behavior depends on the quantity type:

  • Per Unit (default) — the item quantity is per part, so the total is multiplied by the part quantity.
  • Lot — the item quantity is a fixed total for the entire order.
Per-Unit Mode:  Total = Item Cost x Part Quantity
Lot Mode:       Total = Item Cost

If the item is marked as Customer Supplied, its cost is zero.

Quote Total

The quote total sums all parts:

Subtotal = Sum of all Part Totals
Tax = Calculated based on your company's province and the client's billing location
Quote Total = Subtotal + Tax

Tax Calculation

Forge calculates applicable taxes based on:

  • Your company's location — determines which taxes you charge (e.g., GST/QST in Quebec, GST/PST in BC, HST in Ontario).
  • Your client's billing location — determines the tax jurisdiction.

For Canadian companies, this typically means GST (5%) and a provincial tax (varies by province). The tax amounts appear in the cost bar at the bottom of the quote page.

The Cost Bar

At the bottom of the quote page, a sticky cost bar shows:

  • Subtotal — the pre-tax total of all parts.
  • GST / PST / HST — applicable tax amounts and rates.
  • Total — the final amount including tax.

If the quote is in a foreign currency, the cost bar also shows the equivalent in your home currency based on the exchange rate.

Unit Cost vs. Total Cost

Forge shows both perspectives throughout the interface:

  • Unit cost (per unit) — what it costs to produce one piece. Includes the per-piece share of batch costs (setup and programming spread across the quantity).
  • Total cost — the full cost for the entire quantity.

This distinction matters because increasing the quantity lowers the unit cost (batch costs are spread over more pieces) while increasing the total cost.

Tips for Accurate Pricing

Set your default markups in Settings > Quote Settings so they apply automatically to new quotes. You can always override them on individual materials, operations, or purchased items.

Review the unit cost as you adjust quantities. A quantity change can significantly affect the per-piece price when setup and programming costs are high relative to cycle time.

Use the Sourcing section on the quote page to see a consolidated view of all materials and purchased items that need to be procured. From there, you can create RFQs to get supplier pricing.

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