Other than material expenses, operating costs are all expenditures incurred to manage the firm. Calculate the monthly operating cost first, followed by the daily operating cost. Calculate the operational cost per machine. Manufacturing Cost = (Operating Cost per Day per Machine* SAM) / (Target Efficiency Percentage * Working Hours * 60) Where: SAM is the number of machines used (i.e., batch size) Operating cost includes rent, electricity, water, gas, maintenance, and other operating expenses. It does not include investment cost such as purchase price of equipment. Daily operating cost is the amount you need every day to operate your factory. It includes payroll, utilities, supplies, operations research, etc. Monthly operating cost is the total amount you need each month to cover the operating cost. It includes profit, loss, taxes, debt service, etc. Equipment cost is the initial purchase price of the factory equipment. It includes the cost of the machinery, building, and other associated expenses. Daily operating cost is the amount you need every day to run the factory. Manufacturing cost is the total amount you need every month to cover the manufacturing cost.