Estimate accurate manufacturing costs for OEM and contract manufacturing. Calculate raw material, labour, overhead, packaging, quality testing, and target pricing with profit margin.
Manufacturing cost calculation follows a structured approach. For brands sourcing from contract manufacturers, understanding the cost breakdown helps negotiate better prices and set realistic budgets.
Standard Manufacturing Cost Formula:
Total Manufacturing Cost = Raw Material + Direct Labour + Factory Overhead + Packaging + Quality Testing + Wastage Allowance
COGS (Cost of Goods Sold) per unit = Total Manufacturing Cost ÷ Number of Units
Selling Price = COGS × (1 + Desired Profit Margin%) + Freight + Distribution
For Indian contract manufacturers, typical overhead rates are 15–30% of direct costs. Labour rates vary significantly by state and skill level. Use this calculator to get accurate unit economics before approaching manufacturers.