OH&P

[Alwayslearningelec]

Do you guys mark up your cost WITH overhead included? So your cost is $50,000 plus $5k overhead. Do you apply your markup to $50k or to $55k?

 

[sbirnbaum]

Yes. Always Cost + overhead and Profit above the overhead. (But do not apply O&P to tax.)
Example (10% OH and 10% Profit). Cost is $100 + $8.75(tax)
Calculate as follows: $100 * 10%(oh) = $110 * 10%(pr) = $121 + $8.75(tax) = $129.75