What does RKW stand for?

Reichskuratorium für Wirtschaftlichkeit, a German full-costing method. It allocates all of the company's costs and expenses, including administrative and sales, to the production centers.

What is the difference between RKW and absorption costing?

Absorption costing assigns only production costs to the product. RKW goes further and also includes administrative, financial and sales expenses.

Should I use available hours or productive hours?

Actual productive hours, recorded in production. Using available hours artificially lowers the hourly rate.

Is make-ready time included in the machine-hour rate?

The cost of make-ready is already inside the hourly rate, because make-ready hours are not counted as productive hours. When quoting, the printer decides whether to charge make-ready separately or build it into job time.

How often should I recalculate?

At least every six months, and whenever there is a significant cost increase or a change in the equipment base.

Costs and estimating

How to calculate the machine-hour rate in a printing plant with the RKW method

By Marcelo Soares Gomes · Oct 31, 2026 · 7 min read

Why the machine-hour rate sets a printer's margin

Every print estimate is, at its core, machine time multiplied by the hourly rate, plus paper, ink and finishing. If the hourly rate is too low, every quote already carries a hidden loss. Worse: the more the printer sells, the more it loses.

RKW (Reichskuratorium für Wirtschaftlichkeit) is the most widely used full-costing method in the printing industry precisely because it leaves nothing out: even the finance team's salaries and the sales rep's commission end up allocated to machine hours.

Step-by-step calculation

1. Split the plant into cost centers

Production centers: where the work happens. Prepress, offset press, digital press, guillotine, folder, finishing.
Service (support) centers: maintenance, warehouse, production planning, quality, shipping.
Administrative and sales: management, finance, HR, sales, IT.

Rule of thumb: machines with very different costs become separate centers. A small digital press and a large-format offset press cannot share the same hourly rate.

2. Gather each production center's direct costs

For each center, add up what belongs to it each month:

Direct labor: wages of operators and assistants including payroll burden (paid leave, bonuses, social security and benefits).
Depreciation: (replacement value − residual value) ÷ useful life in months.
The machine's electricity.
Maintenance and spare parts.
Occupancy: a share of rent, property tax and insurance, proportional to the floor space the machine uses.

3. Allocate in two stages (the heart of RKW)

Service → production: distribute the cost of support departments according to how much each production center uses them. Example: maintenance by each machine's maintenance hours; warehouse by number of material requisitions.
Administration and sales → production: distribute administrative and sales expenses using a stable driver, such as each center's share of direct costs or of productive hours.

The allocation driver must stay the same every month. Changing it at each month-end close makes it impossible to compare costs and margins over time.

4. Calculate actual productive hours

Available hours are not productive hours. The machine stops for make-ready, maintenance, plate changes, lack of work and meetings.

Available hours = working days × shifts × hours per shift.
Productive hours = available hours × actual efficiency (recorded on the shop floor, not estimated).

5. Divide

Machine-hour rate = (direct costs + service allocation + administration and sales allocation) ÷ productive hours

Example: 4-color offset press

The figures below are hypothetical, only to illustrate the method.

Item	Monthly amount
Direct labor (2 operators and 1 assistant, including payroll burden)	US$ 3,600
Depreciation (US$ 600,000 press, 20% residual value, 10 years)	US$ 4,000
Electricity	US$ 800
Maintenance and parts	US$ 800
Occupancy (floor space)	US$ 500
Direct costs	US$ 9,700
Service center allocation	US$ 1,800
Administration and sales allocation	US$ 2,800
Total for the center	US$ 14,300

Hours: 22 days × 2 shifts × 8 h = 352 available hours. At an actual efficiency of 70%, that is 246.4 productive hours.

RKW machine-hour rate = US$ 14,300 ÷ 246.4 h = US$ 58.04 per hour.

Now compare it with the common shortcut, which divides only the direct costs by available hours: US$ 9,700 ÷ 352 h = US$ 27.56 per hour. Less than half. A printer quoting at US$ 28 is paying to work.

Mistakes that distort the hourly rate the most

Using clock hours (24 h/day or 30 days/month) instead of recorded productive hours.
Forgetting payroll burden, which often adds a large share on top of wages.
Leaving administration out of the allocation. That is partial costing, not RKW.
A single hourly rate for the whole plant, mixing machines with different profiles.
Not recalculating. Wage, energy and rent increases, or a new machine, change the result.
Confusing hourly cost with hourly price. The price still needs margin, taxes and commission.

How often to recalculate

At least every six months, and whenever there is a wage increase, a significant energy or rent increase, a machine purchase or sale, or a shift change. In practice, those who calculate in spreadsheets rarely recalculate, because it takes work. That is when the hourly rate gets stale and the margin disappears.

Where ERP data comes in

Actual productive hours, consumption by center and costs are, to a large extent, already in the ERP: production records, material requisitions, purchase invoices, payroll. When the calculation starts from that data, not from estimates, the hourly rate stops being an opinion.

SENSO IT's Cost Map organizes costs by production center and calculates each machine's hourly rate using the RKW method, with two-stage allocation. It is in a pilot program with a waiting list. Explore the Cost Map.

In practice: Cost Map

Explore Cost Map