CalculationScrap and rework costs
Free scrap and rework cost calculator
Calculates cost per good part from production costs, scrapped parts, salvage and successful rework.
How to use the result
Defaults are a worked example. Enter quantities, costs and times actually incurred.
Successfully reworked parts are already included in the good quantity. Unsuccessfully reworked parts belong to scrap; their rework cost must already be included in cost per scrapped part.
This is an operational batch analysis. It does not replace the accounting allocation of normal and abnormal spoilage.
Formulas
good quantity = processed quantity − scrapped quantityscrap loss = scrapped quantity × (cost incurred − salvage credit)rework cost = reworked quantity × rework time / 60 × hourly ratebatch cost = good quantity × base unit cost + scrap loss + rework costcost per good part = batch cost / good quantity Sources: Datar/Rajan: Horngren’s Cost Accounting, chapter “Spoilage, Rework, and Scrap”. https://www.pearson.com/en-us/subject-catalog/p/horngren-s-cost-accounting/P200000012609; ASQ: Cost of Quality, internal failure costs. https://asq.org/quality-resources/cost-of-quality