A work center rate is the cost per hour charged for work performed at a given work center, used to turn scheduled hours into labor cost. It is usually a loaded rate that folds labor, machine, and overhead into one figure. A CNC center at 120 dollars per hour turns eight scheduled hours into 960 dollars of labor cost.
EDGEBIC by User Solutions uses the work center rate as the canonical basis for cost rollup on quotes and orders. This article defines the term and shows how it drives a quoted price.
How It Works
Every work center carries a rate: its cost per productive hour. When the cost engine prices a job, it looks at how many hours the schedule allocated to each work center, multiplies those hours by the center's rate, and sums the results into labor cost. Material cost is calculated separately, and a markup is applied to the combined total to derive the unit price.
The rate is a loaded number by design. Rather than tracking machine cost, direct labor, and overhead as separate lines, most shops roll them into a single hourly figure per work center. That keeps the cost math simple: hours times rate, summed across the routing, is the labor side of the quote. Because the rate lives on the work center, one setting prices every job that ever touches that machine.
A routing step can override the rate for itself. When a step carries its own labor cost per hour, the engine prefers that over the work center rate, falling back to the center's rate whenever the step value is zero. That lets a specialized operation be priced differently without disturbing the rate for every other job on the same machine.
A Concrete Example
Take a quote for 200 units of a product with a two-step routing. Step one runs on a milling center rated at 55 dollars per hour and needs 8 hours per unit, so 1,600 hours total. Step two runs on an assembly center rated at 30 dollars per hour and needs 2 hours per unit, so 400 hours.
The cost engine multiplies and sums: 1,600 hours at 55 dollars is 88,000 dollars, and 400 hours at 30 dollars is 12,000 dollars, for 100,000 dollars of labor cost. Material adds 2,400 dollars from the product's unit cost. With a 25 percent markup, the total of 102,400 dollars becomes a unit price of 640 dollars. Every dollar of that traces back to hours multiplied by a work center rate.
How EDGEBIC Uses It
The rate drives the quote simulation. When you run a what-if quote, the engine schedules the job against real capacity, sums the hours at each work center, and prices them at the work center rate, or the per-step override where one is set. The result is a realistic labor cost built from the actual scheduled hours rather than a rough estimate.
One caution follows directly from the math: if a production work center has no rate set, the hours there cost nothing, which silently underprices the quote. Populating a realistic loaded rate on every work center is what keeps quotes honest. Because the cost rollup builds cost from labor hours and material only, overhead belongs inside the loaded rate rather than a separate line. Which side of that split a resource falls on comes from its physical type, which classifies it as Machine, Labor, Tool, or Material.
The work center rate is the foundation of the cost rollup, and the markup percent turns the rolled-up cost into a price. The manufacturing glossary covers the related costing terms, and the quote scenario shows how the same rates price competing what-if routings side by side.
Expert Q&A: Deep Dive
Q: My quotes are coming out too cheap and I cannot see why. Where do I look first?
A: Check that every production work center has a rate set. The cost engine multiplies scheduled hours by the work center rate, and if that rate is left at zero, the hours at that station contribute nothing to labor cost, silently underpricing the quote. It does not error; it just quietly costs those hours at zero. Walk your work center list and confirm each has a realistic loaded rate, then re-run the simulation. This one gap is the most common cause of a quote that looks suspiciously low, because a single unpriced station can drop a large block of hours out of the total.
Q: Should I bury overhead in the work center rate or track it as a separate cost line?
A: In this system the practical answer is to load overhead into the work center rate, because the cost rollup builds cost from two streams only: labor hours times the rate, plus material. There is no separate overhead line in the quote math. So a loaded rate that folds machine cost and shop overhead into the hourly figure is how you capture those costs. Set each work center's rate to its fully loaded cost per hour, and the rollup will carry overhead through to the quoted price correctly without any extra bookkeeping.
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