The M&P (Machine and Personnel) Rate is a critical manufacturing and job-costing metric used to determine the true hourly cost of running a specific production process. Unlike simple labor rates, the M&P rate combines the capital depreciation and maintenance of machinery with the fully burdened cost of the person operating it.
How the M&P Rate is Calculated
This calculator uses a standard cost-accounting approach to blend equipment and human capital costs:
Hourly Machine Component: Calculated by dividing the annual depreciation (Price / Useful Life) plus annual maintenance costs by the total expected annual operating hours.
Hourly Personnel Component: Calculated by taking the base hourly wage and applying a "burden" or overhead multiplier to account for taxes, benefits, insurance, and administrative costs.
Combined M&P Rate: The sum of both components, representing the baseline cost to run that station for one hour.
Practical Example
Imagine a CNC machine that costs $100,000 with a 10-year lifespan. It costs $4,000 annually to maintain and runs 2,000 hours per year. The operator earns $30/hour with 20% overhead.
Accurate M&P rates are essential for pricing products correctly. If your M&P rate is underestimated, you may find that your profit margins disappear once machine replacement costs and overhead expenses are realized. Conversely, overestimating these rates might make your quotes uncompetitive in the market.
function calculateMPRate() {
var machinePrice = parseFloat(document.getElementById('machinePrice').value);
var usefulLife = parseFloat(document.getElementById('usefulLife').value);
var annualMaint = parseFloat(document.getElementById('annualMaint').value);
var operatingHours = parseFloat(document.getElementById('operatingHours').value);
var laborWage = parseFloat(document.getElementById('laborWage').value);
var overheadPerc = parseFloat(document.getElementById('overheadPerc').value);
if (isNaN(machinePrice) || isNaN(usefulLife) || isNaN(annualMaint) || isNaN(operatingHours) || isNaN(laborWage) || isNaN(overheadPerc)) {
alert("Please enter valid numeric values for all fields.");
return;
}
if (usefulLife <= 0 || operatingHours <= 0) {
alert("Useful life and operating hours must be greater than zero.");
return;
}
// Machine Logic
var annualDepreciation = machinePrice / usefulLife;
var totalAnnualMachineCost = annualDepreciation + annualMaint;
var hourlyMachineRate = totalAnnualMachineCost / operatingHours;
// Personnel Logic
var burdenFactor = 1 + (overheadPerc / 100);
var hourlyPersonnelRate = laborWage * burdenFactor;
// Total
var totalMPRate = hourlyMachineRate + hourlyPersonnelRate;
// Display
document.getElementById('resMachineRate').innerText = "$" + hourlyMachineRate.toFixed(2) + " /hr";
document.getElementById('resLaborRate').innerText = "$" + hourlyPersonnelRate.toFixed(2) + " /hr";
document.getElementById('resTotalRate').innerText = "$" + totalMPRate.toFixed(2) + " /hr";
document.getElementById('mpResult').style.display = 'block';
}