Estimating & Costs
Estimating math turns quantities into dollars and schedules.
Labor cost = workers × hours × rate · unit price = quantity × $/unit · markup % = (price − cost) ÷ cost · bid = direct cost × (1 + O&P %) · hours = labor budget ÷ rate · days = quantity ÷ daily production.
Worked examples
- 3 workers × 8 hours × $40/hr = $960 of labor.
- 500 sq ft × $3.50 = $1,750.
- $10,000 direct cost + 15% overhead & profit = $10,000 × 1.15 = $11,500 bid.
- A crew laying 200 ft/day needs 5 days for 1,000 ft.
- A $4,800 labor budget at $40/hr buys 120 hours.
Watch the difference between markup (added to cost) and margin (profit as a percent of the selling price) — the exam likes to test markup.
Practice: Estimating & Costs
Frequently asked
How do you turn a direct cost into a bid?
What is markup?
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