Burdened rate
The full cost of one hour on a work center, with machine ownership, space, power, maintenance, tooling, operator and overhead in it, at honest utilization.
Every cycle estimate on every quote gets multiplied by this number, which makes it the highest leverage figure in the building and, on most floors, the least examined. The usual argument starts when 2 quotes for similar parts land 15 percent apart and someone asks whether the difference is efficiency or arithmetic. It is almost always arithmetic, and specifically the rate.
What belongs inside is everything the hour actually consumes. The machine’s purchase amortised over its working life, the floor space it occupies, the power it draws under load, planned and unplanned maintenance, perishable tooling as a running share, the operator at the true fraction of their attention, and the slice of supervision, scheduling and quality that exists because the machine does. Then the whole build divides by the hours the machine honestly runs, setup and waiting included, rather than the hours everyone hoped for in January.
The direction of the error is what makes it dangerous. An overstated rate loses quotes visibly and gets corrected fast. An understated rate wins work that loses money on every piece, and nothing surfaces it, because the jobs are busy, the invoices get paid, and the loss exists only in the gap between quoted and actual that nobody compares. On program work the gap compounds, a cent understated on one line of the site’s worked spool valve runs to tens of thousands of dollars across a 6 year program.
The full build, the common omissions and the once-a-year rebuild discipline are walked through in what a burdened rate actually includes. The short version is that the inputs already sit in your ledger, your payroll and your schedule, and one afternoon per work center per year buys a number you can defend line by line.