I calculate cost per hole on every job, even quick quotes. Knowing the true cost keeps my pricing accurate and highlights where to improve. Here is my complete method for calculating deep hole drilling costs.
The Five Cost Components
Every hole cost breaks down into five components. The percentages vary by job, but the structure is the same.
| Component | Typical Range | What It Includes |
|---|---|---|
| Machine time | 50-60% | Cycle time x machine hourly rate |
| Tooling | 15-25% | Drill cost per edge + regrind cost |
| Labor | 10-20% | Load/unload time x hourly rate |
| Coolant | 5-10% | Coolant purchase + filtration + disposal |
| Overhead | 5-10% | Facility, management, quality, utilities |
Machine time is always the largest component. Reducing cycle time has the biggest impact on cost per hole. I focus on machine time first when optimizing a job.
Detailed Calculation Method
I use a detailed spreadsheet for each job. Here is the calculation process with a real example.
Example job: 10mm hole, 200mm deep, in 4140 steel, 500 parts
Step 1: Calculate cycle time
- Drilling time: 200mm / 76 mm/min feed = 2.63 minutes
- Peck retract time: 30% of drilling time = 0.79 minutes
- Part load/unload: 1.5 minutes
- Total cycle time per hole: 4.92 minutes
Step 2: Calculate machine cost per hole
- Machine rate: $85/hour = $1.42/minute
- Machine cost per hole: 4.92 minutes x $1.42 = $6.99
Step 3: Calculate tool cost per hole
- Drill cost: $45 per edge (new drill cost distributed over expected regrinds)
- Regrind cost: $15 per regrind
- Tool life: 150 holes per edge
- Tool cost per hole: $45/150 = $0.30 drill + $15/150 = $0.10 regrind = $0.40
Step 4: Calculate labor cost per hole
- Operator labor rate: $35/hour
- Time per hole (load/unload only): 1.5 minutes = 0.025 hours
- Labor cost per hole: $35 x 0.025 = $0.88
Step 5: Add coolant and overhead
- Coolant cost per hole: $0.15 (oil coolant at $12/gallon, 0.5 gallon consumption per 100 holes)
- Overhead per hole: 10% of subtotal = 10% of ($6.99 + $0.40 + $0.88 + $0.15) = $0.84
Total cost per hole: $6.99 + $0.40 + $0.88 + $0.15 + $0.84 = $9.26
I add a 20% margin for profit, giving a quote of $11.11 per hole.
Tracking Cost Changes Over Time
I track cost per hole for high-volume jobs over time. If the cost increases, I investigate the cause. The most common cause is reduced tool life that requires more frequent tool changes.
Here are cost changes I have seen and their typical causes:
| Cost Change | Likely Cause | Action |
|---|---|---|
| 5-10% increase | Tool regrind quality dropped | Check regrind supplier |
| 10-20% increase | Coolant concentration wrong | Check and adjust coolant |
| 15-25% increase | Material hardness variation | Verify material cert |
| 5-15% decrease | Operator became more efficient | Standardize best practice |
| 20%+ decrease | Process improvement | Document and replicate |
Tracking costs also catches problems before they become emergencies. A gradual increase in tooling cost might mean the tooling supplier changed their regrind process. I caught this once and saved $2000 per month by switching suppliers.
Quick Estimation Method
For quick quotes when I do not have time for the full calculation, I use a simplified formula:
Cost per hole = (Machine rate x Cycle time) + Tool cost per hole
The machine rate needs to include everything — power, coolant, maintenance, depreciation, and overhead. I use $100-125/hour as my all-in machine rate for quick estimates.
For a 5-minute cycle with a $0.50 tool cost per hole:
- Quick estimate: ($100/hour x 5/60) + $0.50 = $8.33 + $0.50 = $8.83
This quick method is accurate enough for quoting. I refine it with the detailed calculation when I get the job.
Key Takeaways
- Machine time is 50-60% of total cost — reducing cycle time has the biggest impact
- Use the five-component breakdown for accurate costing: machine, tooling, labor, coolant, overhead
- Track cost per hole over time to catch problems early
- The quick formula (machine rate x cycle time + tool cost) works for estimates
- Add 20% margin for profitable pricing
- Investigate any cost increase over 10% from baseline
For more on improving efficiency, see my guide on material removal rate calculations.