I do a test 50mm square and 25mm circle inside, profiled from the outside. This dimensiones are easier to measure. I use phenolic paper board as it does not change dimensions after the cut like MDF, wood and some plastics do.

The way you did the test tells me really nothing.
-may be you did not measure it properly as its very small piece
-the MDf is getting bigger just 1 min after the cut.
-such small pieces can show small deviation which rapidly could translate to much bigger when a 10cm piece is cut.


Obviously your machine far from strong. But even that could be compensated to some extend in Mach 3 via the step calibration
/example - http://www.instructables.com/id/Auto...-Using-Mach-3/ or search google and read the Mach3 manual.

Now the problem with compensation such a machine lies that every time you change depth of cut and material cut you will have again to do that. I have small belt driven machine where i have 3 different screens with different calibration, one for plastic, one for wood and one for aluminum. That all to compensate the belt stretch for different materials.


Why i do a test circle and a square. The circle is obvious, the square is to help identify the specific problem. Some times the square will be Ok and the circle not. Funny, yes. That means the plunge rate is too much for the weak machine and the depth of cut is way to big.