What is Shop Rate?
The Shop Rate is the price you pay per hour for a shop's services. This can include anything from auto repairs to custom woodworking, fabrication, or machining.
Knowing the Shop Rate helps you budget better and avoid unwelcome surprises when you get the bill. It allows you to compare rates between service providers and make informed decisions.
How to Calculate Shop Rate
Calculating the Shop Rate requires two pieces of information:
- The total cost of the job ($)
- The total hours spent on the job
Formula:
[\text{Shop Rate} = \frac{\text{Total Cost}}{\text{Hours Worked}}]
Where:
- Total Cost is the complete price in dollars for the job
- Hours Worked is the total time taken to complete the job
Calculation Examples
Example 1
Given:
- Total Cost: $6,000
- Hours: 30
Calculation:
[\text{Shop Rate} = \frac{6{,}000}{30 \text{ hours}} = 200 \text{ per hour}]
The shop rate is $200/hour.
Example 2
Given:
- Total Cost: $9,000
- Hours: 45
Calculation:
[\text{Shop Rate} = \frac{9{,}000}{45 \text{ hours}} = 200 \text{ per hour}]
The shop rate is $200/hour.
Reference Table
| Total Cost | Hours | Shop Rate |
|---|---|---|
| $6,000 | 30 | $200/hr |
| $9,000 | 45 | $200/hr |
| $1,500 | 10 | $150/hr |
| $3,500 | 20 | $175/hr |
Why Shop Rate Matters
If you know a shop charges $200/hour and estimate a job will take 5 hours, you can budget $1,000 for the service. This helps you:
- Make informed decisions
- Compare prices between shops
- Avoid budget overruns
- Request detailed breakdowns for complex jobs
Knowing how to calculate shop rate puts you in control of your service expenses.