Here are my proposed rules for crafting multi-tier masterwork items.  Note that these rules do<strong>not</strong>address the base amount of time to craft an item.<br/><br/>Creating Masterwork Items: The character can make a mastercraft item - a weapon, suit of armor, shield, or tool that conveys a bonus on its use through its exceptional craftsmanship, not through being magical. A mastercraft item costs three times normal because of the materials and craftsmanship used and has a Craft DC 5 higher than normal (stacking with each level of masterwork bonus).  The time to craft such items is also increased based on the table below.  Lastly, crafting such masterful works takes skill.  The character's rank in a skill, plus Skill Focus (Craft)-if applicable-must meet the required number.  Everything else (paying 1/3 the base cost, making periodic Craft checks, etc.) remains the same.<br/><br/>Level      Bonus   Rank   DC   Price   Time   Longsword   Full Plate<br/><br/>Well      +1   1   +5   x10   x1.5    1,515      3,500<br/>Fine      +2   5   +10   x20   x2   3,015      5,500<br/>Superb      +3   8   +15   x30   x3   4,515      7,500<br/>Excellent   +4   11   +20   x40   x4   6,015      9,500<br/>Expert      +5   15   +25   x50   x5<br/>Exceptional   +6   18   +30   x60   x6<br/>Extraordinary   +7   21   +35   x70   x7<br/>Legendary   +8   25   +40   x80   x8<br/>Perfect      +9   28   +45   x90   x9<br/>Divine      +10   31   +50   x100   x10<br/><br/>Repairing Items: A character can repair an item by making a Craft check against the same DC that it took to make the item in the first place, -5 (since he's only fixing it, not making it anew). The cost of repairing an item is one-fifth of the item’s price.<br/><br/>Aid another: You can't have more people working on an item than three time the item's size category relative to the crafters - that is, up to three humans (Medium) can work on a suit of human-size armor; 12 could work on a small house (Huge); 48 could work on a small castle (Colossal). By "work on the item" this means adding their bonuses as per aid another - this provides a decent guideline for DMs.<br/><br/>Cost Modifier: Mastercraft items add a modifier based on the quality (see below); the multiplier is then applied to the total price.<br/>For example: Jalya wants to buy a set of superbly crafted half-plate. Half-plate is heavy armor (+500 gp modifier); superb craftsmanship has a cost multiplier of x9. The end price is 600 (base price of the item) + (500 x 9) = 5,100 gp<br/><br/>Modifiers:<br/>Light armor   +100 gp<br/>Medium armor   +150 gp<br/>Heavy armor   +200 gp<br/>Ammunition   +15 gp<br/>Light weapon   +100<br/>One-handed weapon +150<br/>Two-handed weapon +200<br/>Buckler      +40 gp<br/>Light shield   +50 gp<br/>Heavy shield   +60 gp<br/>Tower shield   +70 gp<br/>Other items   +50 gp/lb.<br/><br/>Weapon Enhancements<br/>The following enhancements can be added to mastercraft weapons. The Bonus listed below is the minimum mastercraft bonus required to apply the particular enhancement. For example, a well-crafted weapon can have any enhancement with a +1 bonus cost added to it; a finely-crafted weapon can have two +1 enhancements or a single +2, etc.<br/><br/>Balanced   +1<br/>Crushing   +1<br/>Heavy      +2<br/>Penetrating   +1<br/>Serrated   +2<br/>Sharpened   +2<br/>Strength   Var.<br/>Strong      +1<br/><br/>Balanced: The weapon is exceptionally well-balanced; it grants a +1 craft bonus to attack rolls.<br/>Crushing: This enhancement can be applied to bludgeoning weapons only. The weapon has a heavier head, giving it more crushing power. It has a +1 craft bonus to damage.<br/>Heavy: The weapon weighs 10% more than usual, but has a +2 craft bonus to damage and deals double damage against objects. This enhancement cannot be applied to Light weapons, and can be added to a weapon only once.<br/>Penetrating: This enhancement can only be applied to piercing weapons. The weapon is weighted toward the head, which is reinforced, giving it much greater penetration power. It has a +1 craft bonus to damage.<br/>Serrated: The weapon's blade is serrated, enabling it to open horrible wounds. The blade deals +1d3 points of damage. This enhancement can only be applied to bladed weapons or arrows, and only once.<br/>Sharp: The weapon's blade is exceptionally sharp, enabling it to slice through even the thickest hide. It has a +1 craft bonus to damage. This enhancement can only be applied to edged weapons.<br/>Strength: The weapon has been specially modified to take advantage of a high Strength bonus.  This enhancement is most often added to bows (composite short or long only), but can be added to any ranged weapon. Each +1 of the Strength bonus equals a +1 craft bonus.<br/>A ranged weapon can receive only so much of a Strength bonus before it must be increased in size to take advantage of greater Strength, as noted below<br/>Strong: The weapon has been specially reinforced, giving it half again as many hit points as a normal item of its type. This enhancement can be applied only once<br/><br/>Weapon Type         Medium      Large      Huge<br/>Longbow, hvy crossbow      +1 to +5   +6 to +10   —<br/>Shortbow, lt crossbow      +1 to +4   +5 to +8   +9 to +10<br/>One-handed         +1 to +3   +4 to +6   +7 to +10<br/>Sling            +1 to +3   +4 to +6   +7 to +10<br/><br/>Armor Enhancements<br/>The following enhancements can be added to mastercraft armor and shields. The bonus listed below is the minimum mastercraft bonus required to apply the particular enhancement. For example, a well-crafted set of armor can have any enhancement with a +1 bonus cost added to it; a finely-crafted set of armor can have two +1 enhancements or a single +2, etc.<br/><br/>Defensive   +1<br/>Mobile      +2<br/>Spellcaster   +2<br/>Strong      +1<br/><br/>Defensive: The armor or shield is constructed in such a way that it provides greater protection for its wearer without sacrificing mobility. In effect, it grants a +1 enhancement bonus to Armor Class without having its weight, Dex penalty, or Concentration check penalty increased. This enhancement can be added multiple times; the AC bonus stacks.<br/>Mobile: The armor is much more flexible and generally fitted to its wearer, enabling greater range of motion. The maximum dexterity is increased by 1 and the armor check penalty is reduced by 1. This enhancement can only be added to armor, not shields. It can be added multiple times, but the Dex penalty cannot be more than doubled or the check penalty below half its original value.<br/>Spellcaster: Armor with this enhancement has been made with spellcasters in mind – it is less restrictive, but at the cost of armor bonus. This enhancement can be added multiple times; each time, it reduces the effective armor bonus by +1 and the spell failure chance by 10%.<br/>Strong: The armor or shield has been specially reinforced, giving it half again as many hit points as a normal item of its type. This enhancement can be added only once.<br/><br/><br/>For the most part, these rules benefit fighters more than casters, but that should compensate somewhat for the fact that the lower starting money hurts fighters more.  Let me know what you think.