EDGEBIC Costing and Rates Explained: Four Numbers Behind Every Quoted Price

EDGEBIC by User Solutions builds a job's cost from four maintained numbers: a rate on each work center, an optional rate override on individual routing steps, a unit cost on each product, and a markup percentage. The schedule supplies the hours, those numbers supply the money, and the result is a cost breakdown and a unit price that came from the same plan the shop is going to run.

This is estimating and quoting cost, not accounting. It answers what this job should cost given how it will actually be scheduled, which is the question a quote needs answered.

Labor: Hours Times a Rate

Labor cost is straightforward arithmetic over a real schedule.

For every work center the job touches, EDGEBIC sums the hours booked on it and multiplies by a rate. Sum across all of them and you have the labor cost.

The rate is resolved in two steps, most specific first.

That two-level chain is more useful than it first appears. The work center rate is the sensible default for a machine, maintained in one place and applying to every routing that uses it. The step override handles the case where one operation genuinely costs more or less than the machine's normal rate: an outside process, a skilled operation on an otherwise ordinary machine, a premium arrangement for one customer's part. You get the override without distorting the rate everybody else inherits.

Setting them is covered in how to set a work center cost rate, and the concept in general terms in what is a work center rate in cost rollup.

The hours side deserves one clarification. The hours used are the work hours booked by the schedule, not the wall-clock span of the job. A job that spans four days because it waits overnight and over a weekend is not charged for the waiting. That is the correct behavior for cost and the reason a job's elapsed time and its costed hours are properly different numbers.

The Silent Zero

Here is the single most expensive thing to know about this model: a work center with no rate contributes nothing to labor cost, and nothing warns you.

The hours are scheduled correctly. The plan is right. The cost is simply zero for that machine, and the quote comes out cheaper than the job will be. Because the failure produces a plausible number rather than an error, it survives review, and it keeps surviving until somebody compares quoted cost to actual on a run of jobs and finds a consistent gap.

The audit is one sort: order your work center list by rate and look for the zeros. Every production work center you quote through needs one. It is worth doing on a schedule rather than once, because new work centers arrive over time and arrive at zero.

Material: Components, With a Fallback

Material cost comes from what the routing consumes. Components appear on a routing as material steps, each carrying a quantity per parent unit, and their cost flows into the material side of the job.

When no material rows produce a figure, EDGEBIC falls back to the product's own unit cost multiplied by the order quantity. That fallback is what makes a cost appear for a product whose routing lists operations but no components, which is common in shops that never modeled their bill of materials in a scheduling system.

The fallback is helpful and it has a shelf life. A product unit cost is a single number entered by a person, and unlike a rate it tends to be entered once, at product launch, and never revisited. Quoting against three-year-old material prices is a slow, invisible margin leak, and reviewing product costs on anything you quote regularly is the cheapest correction available. How to set a product cost covers where the field lives.

Multi-Level Products Roll Up

For products built from sub-assemblies, the estimate walks the whole tree. Hours, labor, and material roll up recursively through every level, applying each step's quantity multiplier as it goes.

This closes a gap that used to bite hard: a parent product whose work lived almost entirely in its children once read close to zero hours, and every quote priced from that estimate understated in the same direction. Now nested levels count, a component referenced twice counts twice, and a circular reference in the data is detected rather than followed forever. The same rolled-up figures feed both the order cost analysis and the quote's pre-simulation estimate, so the two agree by construction rather than by coincidence. Sub-assembly scheduling covers the model those numbers come from.

Markup, Override, and Price

Once cost is known, price is one more step.

The effective total cost is either the calculated total, material plus labor, or a manual cost override if a planner has supplied one. The override is the honest way to price at a number you have already agreed with a customer: the fixed figure drives the price, and the calculated breakdown stays visible underneath so you can see the difference. That difference is the most useful line in the record, because it is the one that tells you whether a fixed price is a deliberate concession or an unnoticed loss. Using the manual cost override covers it.

A markup percentage, 25 percent by default, then produces the unit price: the effective total cost increased by the markup and divided by the quantity.

One behavior is worth knowing because it surprises people. The markup fills in a unit price only when the price is currently zero. Once a planner has set a price by hand, later runs leave it alone rather than overwriting it. That is the right default, a manually agreed price should not evaporate because somebody re-ran a simulation, and it means resetting the price to zero is how you deliberately ask for the markup calculation again. Setting markup and unit price covers the controls.

Where the Numbers Come From

Two paths produce a cost, and they differ in where the hours originate.

The estimate sums the routing directly, including sub-assembly levels. It is fast, needs no scheduler run, and is what fills the quote's cost fields before anyone simulates.

The simulation runs the actual scheduler against live capacity for a temporary order, then costs the hours it booked. That is quote simulation, and it is the version that can tell you a promise date as well as a price, because it knows what else is already in the plant.

Both use the same rates and the same product costs. The estimate answers what it costs; the simulation answers what it costs and when you can have it.

Where It Fits

Costing sits between master data and quoting: rates and product costs are maintained once, and every quote, order cost analysis, and margin figure reads from them. Getting the four numbers right is a maintenance habit rather than a project, and it is the difference between a margin figure people act on and one they discount.

Reading quote margin and profit covers the output, the quoting guide covers the wider process, what is a cost rollup covers the general concept, the complete EDGEBIC guide maps the platform, and /edgebic covers it as a whole.

Rates Are a Maintenance Job, Not a Setup Job

Every shop enters cost rates during implementation and most never look at them again. Wages change, machines are replaced, energy costs move, and the rates keep quoting last decade's plant. A short annual review of work center rates and the product costs on your regular parts costs an afternoon and is the highest-return hour in the whole cost model, because every quote you send until the next review is priced off it.