Material costs are increased by a predetermined percent to recover indirect G&A (general and administrative) overhead costs on materials. Direct labor costs are increased by another predetermined percent to recover indirect G&A costs on labor. Equipment costs, other than rental equipment, are usually included in the indirect G&A overhead mark-up percents. Sales tax and labor Full Article…
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Capacity Based Markup
The expression coined by builder and author David Gerstel to describe a markup methodology that places the responsibility of recovering overhead costs solely on the labor or available production capacity a company has. Also know as a PROOF Type Markup or Indexed Markup, Differential Markup, or Labor Based Markup the method is rooted in the principles of Activity Based Costing and Full Article…
Fixed Overhead
ContentsOther Definitions Fixed Overhead costs are those regularly recurring expenses which are constant and do not normally fluctuate with the business volume or the number of production employees employed. They can be the Overhead Costs incurred in support of the manufacturing process that can not be directly allocated to specific items, and do not vary with Full Article…
Variable Overhead
The indirect costs of operating a business that fluctuate somewhat with the level of business activity. While most overhead costs such as rent, salaries and insurance are typically fixed, overhead costs that increase with higher business activity and decrease with lower business activity are termed as variable overhead. For the building & remodeling contractor Variable Overhead should Full Article…
Across-the-Board Markup
he term used by authors and consultants Linda Case and Victoria Downing to describe a markup methodology that places a markup to achieve a prescribed Gross Profit on the sum of all the Labor, Materials, SubContractor, and Equipment costs. The same thing as a Total Volume Based Markup and an Uniform Percentage Markup. References 1. Calculating Labor Costs by Shawn Full Article…
Gross Profit (Gross Margin)
Gross Profit (also called gross margin or gross profit rate) is the difference between revenue and cost. This is how much money you have left after you have subtracted the direct costs from the selling price. 2 It identifies the amount available to cover other operating expenses. Generally, it is calculated as the selling price Full Article…
Margin
Margin is the percentage of the final selling price that is Gross Profit. References 1. Calculating Labor Costs by Shawn McCadden Journal of Light Construction http://www.jlconline.com/cgi-bin/jlconline.storefront/439b7bfe0003c26a27177f00000105cd/Product/View/0202calc 2. How Much Should I Charge; Pricing Basics for Making Money Doing What You Love. Maxrohr; 1 edition (May 1999) 0966571916How Much Should I Charge; Pricing Basics for Making Full Article…
Markup
A markup is what percentage of the cost price do you add on to get the selling price. Markup is the difference between the cost of a good or service and its selling price. A markup is added on to the total cost incurred by the producer of a good or service in order to Full Article…