Nigel –
I think it more usual that it's not the price of waste as off-cuts and swarf that is accounted for. The scrap value is minimal and probably less than than the machine-cleaner's time. Instead the customer pays for the total of the raw materials. Most ends up in the scrap bin, but there may be enough remaining for other work.
I was for several years the materials store-keeper for a printing-machine manufacturer, when it had a machine-shop making the bulk of the smaller components. Nowadays it has them all made outside.
The record was of the total length of bar or area of plate used per batch of blanks. The remainder from stock length was returned to store or if scrapped, its length added to the issue.
The aluminium plate blanks I cut for some components were large L-shapes so the enclosing rectangle was that issued. Using the rectangular off-cuts for some other parts, was a bonus by double-charging – though the overheads of my fixed labour cost probably negated that!
'
Around the same time, I orderd two or three large, flame-cut rings in 3/4" steel plate, from a neighbouring company, for my own model-engineering project. When I paid and collected them I saw the discs from the centres, propping up up the wall.
"Oh, and those as well please!"
The man looked surprised.
"I work in a factory stores", I said, "I know how these things are charged for, so I know I have just paid for them as well as the rings".
The bloke duly picked them up and put them on the counter for me.
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So a lesson – if you ever order a stock length or area but ask it be cut to sizes…. ask for the remainder unless the sale is clearly by cut metre / square metre.
(I assume craft suppliers such as ours, buying wholesale mill lengths but selling by foot or metre cut lengths, share the remainder cost around the price per sold unit, as part of the overheads component.)