Work out scrap rate instantly with clear inputs, formula shown and shareable results.
Scrap rate is scrapped units over units produced, but the number that gets management attention is the net cost: material consumed less any recovery value from resale or remelt. Labour and overhead already absorbed into scrapped units make the true loss higher still.
Scrap rate
Scrap % = Units scrapped / Units produced x 100
Net scrap cost
Net cost = Units scrapped x (Material cost - Recovery value)
For a full cost of poor quality, yes — add the labour and overhead absorbed up to the point of rejection. This calculator isolates the material loss.
Scrap is rejected product. Waste also covers process trim, offcuts and yield loss that were never going to be product.