A useful milling estimate starts with the job your shop will actually run: the stock you buy, the setups you need, the time on the machine, and the work required after cutting. Part volume alone cannot tell you that cost.
This guide provides a calculation you can use in a spreadsheet or quoting system. The figures are illustrative, not market rates or a quote from Phasio. Replace them with your shop's rates and measured job data.
Collect the information before calculating
Ask for the current CAD revision and drawing, material grade, quantity, critical tolerances, finish, inspection requirements, and delivery date. Record whether the customer wants one delivery or several releases. A quantity of 100 spread across ten separately scheduled runs may carry more setup cost than one run of 100.
Check requirements that do not appear in the solid model: datum schemes, threads, surface roughness, certification, and which dimensions matter functionally. Ask the customer to resolve conflicts between the drawing and model before issuing a firm quote.
Separate batch costs from costs per part
Use the following structure:
Batch cost = programming + setup + fixtures + first-article work
Unit running cost = stock + machining + direct labor + tooling + finishing + inspection
Total estimated cost = batch cost + quantity × unit running cost
Estimated cost per part = total estimated cost ÷ quantity
Only include a cost once. A fully burdened machine rate may already include electricity, depreciation, maintenance, and an overhead allocation. An attended machine rate may also include operator labor. Document what your rate covers before adding separate labor or overhead charges.
Stock cost is the cost of purchased material, including machining allowance and any relevant cutting or procurement charge. It is not simply the mass of the finished part. Credit recoverable scrap only if you have a realistic basis for doing so.
Machine time should account for cutting and the non-cutting time that occupies the machine. Programming and setup require their own estimates. Use proven similar jobs, CAM estimates, or an estimator's process plan as appropriate, and compare estimates with completed work.
Worked example: a batch of 20 parts
Assume one batch of 20 accepted parts, with no expected scrap in this simplified example. The machine rate below includes machine overhead but excludes separately listed labor.
- Programming; Calculation: 2 hours × €60/hour; Batch cost: €120
- Setup; Calculation: 1.5 hours × €60/hour; Batch cost: €90
- Stock; Calculation: 20 × €8; Batch cost: €160
- Machining; Calculation: 20 × 0.25 hours × €72/hour; Batch cost: €360
- Handling and inspection; Calculation: 20 × 0.10 hours × €40/hour; Batch cost: €80
- Tooling allocation; Calculation: 20 × €2; Batch cost: €40
- Outside finishing; Calculation: 20 × €5; Batch cost: €100
- Total estimated cost; Batch cost: €950
The batch cost is €210. The running cost is €37 per part. The estimated cost per part is therefore €47.50.
If the same process and batch costs apply at a quantity of five, estimated cost is €210 + 5 × €37 = €395, or €79 per part. This is why spreading setup over quantity is more defensible than applying an arbitrary volume discount. Recheck capacity, tooling life, and the number of setups when quantity changes.
Convert cost into a selling price
Margin and markup are different calculations. For an illustrative target gross margin of 30% on the costs included in the estimate:
Selling price = estimated cost ÷ (1 − target margin)
Batch selling price = €950 ÷ 0.70 = €1,357.14 before rounding
A 30% markup would instead produce €950 × 1.30 = €1,235, with a margin of approximately 23.1%. Neither percentage is a recommended shop target. Your price must also reflect commercial terms and costs omitted from this simplified model. Taxes and shipping are excluded here.
Define when an estimate needs review
Escalate jobs when fixturing, tool access, material availability, inspection effort, or outside processing is uncertain. A geometric fit within a machine envelope does not establish that a part can be held and machined as planned. Equally sized bounding-box dimensions do not establish that a part is cylindrical.
For an incomplete RFQ, provide a clearly qualified budget range and request the missing requirements. The machine-shop quoting guide explains how to qualify those jobs before detailed estimating.
Put the model into your quoting workflow
Phasio provides CNC quoting and production software for manufacturers to apply their pricing logic and manage work. It does not manufacture the customer's parts or replace the shop's CAM process plan.
Before configuring an equation, use these pricing questions to define rates, minimums, quantity behavior, and exceptions. Validate the model against known jobs, including awkward parts and small batches, before allowing it to issue customer prices automatically.
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