David KrauseCase study A uses the rates of the reference company this book uses throughout — it is the direct continuation of Chapter 7. Case studies B and C come from other companies with their own BAB, because injection molding and die casting do not occur in the reference company. Their surcharge rates are therefore deliberately different; each case study carries its own profile.
11.1 CNC 5-axis milling: titanium housing, lot 50
| Item | Rate | €/unit | Note |
|---|---|---|---|
| Direct material Ti6Al4V | — | 85.00 | ERP purchase price |
| + Material overhead | 9.0 % MEK | 7.65 | CC 100 |
| → Material costs | 92.65 | ||
| Direct labor production | €32/h × 0.30 h | 9.60 | net machining time |
| Direct labor CAM | €48/h × 0.024 h | 1.15 | programming time per unit |
| + Residual overhead | 35.1 % DL | 3.77 | CC 210 |
| + Machine costs | €46.37/MH × 0.34 h | 15.77 | MHR from Ch. 7 |
| + SEKF special mill | — | 4.20 | HSC titanium mill, wear |
| + SEKF fixture | €240 / 50 | 4.80 | order-specific |
| → Manufacturing costs | 39.29 | ||
| → Cost of production | 131.94 | ||
| + Administrative overhead | 11.8 % HK | 15.57 | CC 300 |
| + Selling overhead | 6.0 % HK | 7.92 | CC 400 |
| + SEKV free delivery | — | 3.50 | per terms |
| → Total cost | 158.93 | ||
| + Profit margin | 15 % SK | 23.84 | segment target |
| → Net cash price | 182.77 | lot 50 = €9,138.50 |
At €85.00 of €158.93 total cost, the titanium blank alone makes up 53 %. The entire manufacturing block comes to €39.29 — less than half the material. For such parts, purchasing decides the result more than production. A five percent material price rise costs more margin than a ten percent time saving at the machine brings in. The post-calculation in Chapter 12 shows exactly that.
11.2 Plastic injection molding: ABS housing cover
The methodological peculiarity of injection molding is the mold. It is product-specific and therefore does not belong in the machine hour rate, but is allocated across the quantity as a special direct cost. How it is allocated is a commercial decision with substantial price impact:
| Variant | Logic | per unit | When it makes sense |
|---|---|---|---|
| A — total lifetime | €35,000 / 500,000 units | €0.07 | series product with framework contract and secured off-take |
| B — per call-off | €35,000 / 50,000 units first order | €0.70 | first order with uncertain follow-on quantity — hedges the investment |
| C — customer property | mold billed separately | €0.00 | customer commissions the mold themselves |
Variant A and B differ by a factor of ten — for a part whose entire total cost is in the range of a few cents, that is the difference between profit and loss. Whoever costs with variant A and then receives a call-off of only 50,000 units has €31,500 of mold cost uncovered. So always regulate two things contractually: the off-take quantity the costing assumed, and who owns the mold.
11.3 Aluminum die casting: gearbox housing
Die casting brings a peculiarity no machining calculation knows: a considerable part of the material input never becomes the part. Sprue and overflows go back into the melting furnace — they are neither fully cost nor fully free.
| Item | Value | Explanation |
|---|---|---|
| Net part weight | 1,850 g | gearbox housing AlSi9Cu3 |
| + Sprue and overflows | 370 g | 20 % of net weight |
| = Gross material requirement | 2.22 kg | this is the purchase quantity |
| − Scrap credit recirculated material | −€0.22 | 0.37 kg × €0.60/kg |
Whoever takes the net weight as material requirement understates the input by 20 %. The sprue must be purchased, melted, conveyed and remelted — only the material value partly returns, the energy for it never. Conversely it is just as wrong to ignore the scrap credit: then the part is computationally €0.22 too expensive and you lose orders you could have won. Both figures belong shown — and the reference base for the sprue is always the net weight.
11.4 Minimum price and short-term price floor
Not every price must cover full costs — but every cost accountant must know where the limits lie. For the titanium housing from case study A:
| Floor | €/unit | Meaning |
|---|---|---|
| Target price | 182.77 | normal case — covers full costs and profit |
| Long-term price floor | 158.93 | total cost — no profit, but all costs covered |
| Short-term price floor | 121.91 | variable costs — contribution margin zero |
| Absolute minimum | 95.75 | only MEK and DL — every order below destroys substance |
A price between €121.91 and €158.93 improves the result only if the capacity would otherwise stand idle and no better-paid orders are displaced. If the station is fully loaded, every such order costs the forgone contribution margin of the displaced one. And there is a third danger no calculation captures: prices once accepted become the reference for the next order. The framework for this is in Chapter 13.
Chapter 12 takes case study A and compares the pre-calculation with the actual shop-floor feedback: where was the planning off, and what did it cost? The result up front — profit shrinks from €23.84 to €9.58 per unit.
