06.4 · Markup, Margins and Sell Rates

Risk, Corporate and Profit Margins

The three margins are project-wide pools layered on top of cost + markup. Each is independent and shown separately on the sell rate grid so commercial managers can negotiate.

Formulas

PreMarginSubtotal =  DirectTotal + Σ AllocatedMarkup

RiskPool          =  PreMarginSubtotal × RiskMarginPercentage / 100 + RiskMarginAbsolute
CorpPool          =  PreMarginSubtotal × CorporateOverheadMarginPercentage / 100 + CorporateOverheadMarginAbsolute
ProfitPool        =  PreMarginSubtotal × ProfitMarginPercentage / 100 + ProfitMarginAbsolute

The three pools are distributed to items exactly like overhead:

Item.AllocatedRiskMargin             = Item.BuildUpCost / Pool.BuildUpCost × RiskPool
Item.AllocatedCorporateOverheadMargin = Item.BuildUpCost / Pool.BuildUpCost × CorpPool
Item.AllocatedProfitMargin            = Item.BuildUpCost / Pool.BuildUpCost × ProfitPool

How They Compose

Each margin is calculated on the same base (cost + markup). They are not compounding — they don't stack on top of each other. That keeps the contribution per-margin transparent.

FinalTotal = PreMarginSubtotal + RiskPool + CorpPool + ProfitPool

When to Use Absolute vs Percentage

Percentage — scales with project size, preferred default.
Absolute — fixed charges (e.g. "$40,000 for bonding costs" or a known insurance premium).

You can combine both on any margin.

Setting Margins

Markup → Margins:

Field	Example
Risk Margin %	5
Risk Absolute	$0
Corporate Overhead %	4
Corporate Overhead Absolute	$0
Profit Margin %	10
Profit Absolute	$0

Computed totals (RiskMarginAmount, CorporateOverheadMarginAmount, ProfitMarginAmount) update live.

Per-Item Manual Override

On the sell rate grid, each margin cell is editable. Editing a single line's AllocatedProfitMargin flags that line as manually edited. Distributions skip it on the next recalc.

Click Reset Manual Edits to clear overrides and let proportional allocation take over again.

Allocation Methods

Margins default to proportional allocation by BuildUpCost. Alternative methods (Equal, Custom) can be selected in Markup → Allocation Method and stored in the active Allocation Scenario.

Showing Margin Detail on PDF

The PDF report (section 12.3) can be configured to show each margin column separately, or to collapse them into a single "Margin" column for client-facing output.