No need to know the vocabulary first
A few words, explained
- CNC
- Computer numerical control: a computer directs a cutting machine.
- Overhead
- Everyday business costs, such as rent, that need to be covered by the work you sell.
Separate purchase price from usable life
Estimate the cost of the tool, its expected working life, maintenance, and likely replacement value. The goal is a practical recovery amount, not perfect accounting precision.
Allocate cost to productive use
Tools that support paid work should be reflected in the shop rate, machine rate, or job cost. The method matters less than using one consistently.
Review after major changes
A new machine, increased workload, or expensive maintenance event is a reason to update the assumptions. Equipment costs evolve with the shop.
Shop 101
Apply this reference to your project
Use your own project measurements and record how the result affects the material, setup or estimate.
- Name the material, dimension, or cost input that affects the decision.
- Use the reference and related calculator to check the measurement or estimate.
- Test or compare the result before committing final material, time, or client scope.
Try it with your own numbers
Common questions
Why include tool depreciation in a quote?
It helps the business recover the long-term cost of the equipment required to produce paid work instead of treating replacement as a surprise.
Is tool depreciation the same as maintenance?
No. Depreciation is the planned recovery of equipment value over time; maintenance and repairs are additional operating costs that also need an allowance in the estimate.
Should small hand tools be included?
For many shops, small tools and consumables are easiest to recover through the general shop rate or overhead rather than being itemized on every quote.