Price Buildup Guide: Materials, Labor, and Markup

Choose how the material costs enter

Price Buildup turns entered direct costs and markup percentages into a selling price. Open it directly when you already have supplier quote totals. Or start from a supported material calculator and use Build a Price to carry its quantities into connected pricing. Those two starting points use the same price calculations, but the material input is different.

In standalone mode, each material row takes a description, supplier/vendor, and Quote Total. Enter the total for that quote, not a unit price. In connected mode, each transferred material line takes your unit cost and calculates quantity × unit cost. A cost per box is not valid for a quantity shown in pieces unless you first reconcile the packaging.

For a complete quantity example, follow the ACT calculator guide. The same handoff is supported for metal framing, drywall, drywall grid, insulation, blocking, FRP, paint, and drywall taping.

Enter direct costs before choosing markup

Use your own quotes and labor assumptions. Rates below are fictional teaching numbers, not current market prices or productivity guidance. Include burden and other labor costs in your rate or in an intentional cost treatment, without counting them twice.

Build a small estimate you can check by hand

This standalone example represents a small, defined construction scope with a $1,000 supplier quote. It is deliberately independent of the ACT material example so the sample price cannot be mistaken for a quote on that ceiling.

1. Open Price Buildup directly. Enter a material description, supplier, and $1,000 Quote Total.
2. Enter $80 for Equipment / Rentals and $20 for Miscellaneous. Materials plus other direct costs are now $1,100.
3. Select 15% Material / Other Markup. The markup is $165 and that group sells for $1,265.
4. Add a labor row with 2 workers, 2 days, 8 hours/day, and $40/hour. That is 32 hours and $1,280 direct labor.
5. Select 20% Labor Markup. It adds $256 and labor sells for $1,536.

Confirm the final summary instead of comparing only the largest number. If labor shows $640, the worker count or days may be wrong. If material sell shows $1,150, the $100 of other direct costs may be missing. These checks reveal different input mistakes.

Read markup and margin correctly

Markup is measured against direct cost. Gross margin is measured against selling price. A 20% markup on $100 adds $20 and produces a $120 selling price; the $20 is 16.67% of $120. A 20% gross margin on the same $100 would require a $125 selling price and a 25% markup.

BidSimp accepts markup percentages and reports the resulting margin. It does not solve a target margin automatically. In a connected estimate, projected gross profit is selling price less the direct costs entered. That is not net profit after every business obligation. The example's $421 is only meaningful if the included costs and scope are complete.

Review and save a connected estimate

When arriving through Build a Price, price every transferred material line, then review labor, other costs, and both markups. Calculator quantities already include their selected waste and rounding. Do not add a second blanket waste factor to the same quantities in pricing.

Enter a scope name, choose a project or name a new project, and check the confirmation that you reviewed quantities, unit costs, and labor assumptions. Select Save estimate to project. Signing in is required for account saving. Browser drafts are not proof that an estimate has been saved to your account; wait for the saved confirmation.

Use the source-calculation link to revise quantities. On return, compatible prices are retained, but new or incompatible lines may need pricing. Review the changed quantities and labor before saving again. Avoid also saving a standalone copy of the same source into that project, which would duplicate the material scope.

Connected mode offers customer copying/printing and an internal costing print. Customer output contains the scope, quantities, and selling price; internal output contains costs and margins. Review the intended output before sharing. Do not assume that standalone reports have the same customer/internal separation.

Check omissions that arithmetic cannot find

• Confirm tax, freight, unloading, equipment duration, and quote validity. Nothing is added merely because it is customary.
• Review supervision, access, protection, cleanup, overtime, travel, and closeout against the actual scope.
• Separate base scope, allowances, alternates, and exclusions before treating a total as a bid.
• Check whether overhead and contingency are covered by your chosen cost and markup structure. Avoid including the same expense twice.
• Revisit labor assumptions when quantities, sequence, crew, or access conditions change.

Read how to estimate labor hours for the production assumptions and how to check whether an estimate looks right for a broader review. A tidy price summary cannot identify a missing ceiling area or an excluded hardware set.