Many foundries still sell by the kilo. It is a convenient benchmark, but a risky one: two castings of the same weight can cost very different amounts. This guide sets out a method for calculating the true cost of a casting, step by step.
1. Start from poured metal, not casting weight
The metal you need is not the finished casting weight but the poured weight: casting plus gating system, risers and machining allowances. The ratio between casting weight and poured weight is the yield:
Yield = casting weight ÷ poured weight
With a 60% yield, you pour 100 kg of metal to obtain a 60 kg casting. Metal cost is therefore calculated on poured weight, subtracting the value of returns (runners and risers that go back into the cycle) and adding melting losses.
2. Cores
Cores vary enormously in cost: number, weight, sand and binder, core-shop time, coating. A casting with many complex cores can cost more than a heavier, simpler one. That is why cores should be costed per part, starting from the core list in the technical sheet.
3. Moulding and melting
Moulding cost depends on the process (automatic line, hand moulding, gravity die, high-pressure die casting), cavities per mould or plate, and cycle time. Melting includes energy, refractories, ferro-alloys, metal treatment and department labour.
4. Fettling, heat treatment and outsourced work
Fettling, shot blasting, grinding, weld repair, heat treatment and machining can make up a large share of cost, especially for complex or steel castings. Each step should be costed with its own times and hourly rates, or with the subcontractor’s price.
5. The impact of scrap
Scrap is the most frequently underestimated factor. If 5% of castings are scrapped, good castings must also absorb the cost of the lost ones. A simple estimate is:
Cost of a good casting ≈ production cost ÷ (1 − scrap rate)
Scrap should be considered by step: a casting rejected at final inspection has already consumed every previous operation.
6. From cost per piece to cost per kg
Only after adding every component does it make sense to divide by casting weight to get cost per kg. Comparing it with the selling price per kg shows immediately which parts earn a margin and which erode it.
7. Quoted versus actual
Quoted cost is based on standards: expected weights, yields, times and scrap. Real control comes from actual cost, based on production data. Comparing the two by part and job helps fix wrong quotes and reveal process problems.
How a foundry ERP helps
You can do all this in Excel, but keeping it up to date is hard. A vertical ERP such as Fond/Wise starts from the technical sheet (weights, yields, cores, routings), collects actual production data and scrap recorded by quality control, and automatically calculates cost per piece, cost per kg and margin by part and customer.