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Dual Overhead Recovery System (DORS)

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,...

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...

Fixed Overhead

Fixed Overhead basically includes those funds that would be required to operate a business as if there was no work on the books. It’s what keeps the doors open. Fixed Overhead costs are those regularly recurring expenses which are constant and do not normally...

Variable Overhead

The indirect costs of operating a  business that fluctuates 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...

Across-the-Board Markup

The term originally describe by now retired author and business management consultant Linda Case 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...

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. It identifies the amount available to cover other operating...