Change Order Price with Overhead and Profit
Change-order price = direct cost x (1 + OH%) x (1 + profit%).
Example
You enter
- Added direct cost (USD) 10000
- Overhead markup (%) 10
- Profit markup (%) 10
- Current contract total (USD, optional) 500000
You get
- Change-order price 12100
- Markup (margin) 2100
- New contract total 512100
Details, formula, and sources
The compounded markup. $10,000 direct at 10% and 10% -> $12,100 (markup $2,100, 17.4% gross margin); the additive method gives $12,000. Applied to a $500K contract -> $512,100 new total. The contract's general conditions govern the allowed markup.
price = direct x (1 + OH%) x (1 + profit%); markup = price - direct; margin% = markup/price x 100.
The change-order overhead-and-profit markup (compounded) from construction estimating practice / AIA G701, by name.
Overhead-and-profit markup on a change order is standard construction estimating; the allowed rate and method are in the contract.
Estimate. AHJ and licensed professional govern.
Field names used by the API: direct_cost_usd, overhead_pct, profit_pct, current_contract_usd, price, markup, new_contract
- Compounded markup price = direct x (1 + OH%) x (1 + profit%)AIA G701 / estimating practice
- Additive alternative direct x (1 + OH% + profit%) is slightly less; the contract decidesconstruction accounting
- Contract governs the general conditions set the allowed markup and methodscope of this tile