This activity is used to define and maintain markups for an estimate item. Markup is the difference between the cost of a product or service and its selling price. A markup is added onto the total cost incurred to cover expenses and profit in fixing the selling price. Markups can be defined as a value or a percentage add-on of the accumulated cost.
When it is a requirement to define markups for the complete estimate revision, this can be done as a part of the version handling. Markups defined for a version are applied on all the top items. If it is necessary to differentiate the markups for the estimate items, then exists the option to define such per item in the estimate structure.
When a calculation is performed for a combination of; item, revision and version then the markups are accumulated and presented separately from the cost.
It is not possible to add markups to additional costs. An additional cost is a cost that the company must pay for independent of sales or not. Since they are stable reoccurring costs is the need of markup insignificant. Product overhead costs and product cost contingency are part of the product cost so when adding markup for a product with overheads or cost contingency these costs are considered. It is only the additional cost you can’t add markup for.
This activity requires;
As a result of this activity markups defined for an estimate item are considered in the calculation.
Estimate/Estimate Items/Markup
Note: Markup defined for a version are applied on all the top items.
Note: If markups are defined for an item then is the value distributed on each element based on its percentage share of the total accumulated variable cost. This means that the accumulated markup per cost element for a possible parent item is equal to the distribution of the item markup done for the sub-item.