BIZOMAT Tools · Quoting
Quote Margin Check
Does this quote actually make commercial sense?
Checks a quoted price against its cost build-up and your target gross margin, and gives the price needed to hit the target.
Open the calculatorRuns in your browser. No account needed.
How this tool works
Inputs, units and where to find them
| Input | Unit | Typical source |
|---|---|---|
| Quoted selling price | $ | Quoted selling price excluding GST |
| Material | $ | Material cost from the estimate |
| Labour | $ | Labour cost from the estimate |
| Overhead / other | $ | Overhead and other costs allocated to the job |
| Target gross margin | % | Target gross margin from your pricing policy |
What each input means
Open an input to see what it is, its units, the worked example and the common mistakes, with a small diagram.
What this means: Quoted selling price
- What it is
- The total price you intend to charge the customer for the job, excluding GST and other taxes collected for the government.
- Units and format
- Enter a number in $: an amount of money; use one currency for every money input. The form accepts $0.01 or more.
- Example
- The form opens with $10000 as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- A higher price raises gross margin; the margin is measured as a share of this price.
- Get it right
- Enter the price without GST; tax collected for the government is not margin.
What this means: Material
- What it is
- The cost of all materials and bought-in items for the whole job, from the material take-off and supplier prices.
- Units and format
- Enter a number in $: an amount of money; use one currency for every money input. The form accepts $0 or more.
- Example
- The form opens with $3500 as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Adds directly to job cost and lowers margin.
- Get it right
- Include scrap, offcuts, freight and consumables, which are easy to leave out of the estimate.
What this means: Labour
- What it is
- The cost of all labour on the job: estimated hours multiplied by the loaded labour rate.
- Units and format
- Enter a number in $: an amount of money; use one currency for every money input. The form accepts $0 or more.
- Example
- The form opens with $2200 as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Adds directly to job cost and lowers margin.
- Get it right
- Use the loaded rate including on-costs, not the base wage.
What this means: Overhead / other
- What it is
- Indirect and other costs allocated to this job, such as supervision, equipment, travel, subcontract or a share of fixed overhead.
- Units and format
- Enter a number in $: an amount of money; use one currency for every money input. The form accepts $0 or more.
- Example
- The form opens with $1200 as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Adds directly to job cost and lowers margin.
- Get it right
- Use the allocation method your finance team uses so quotes are comparable.
What this means: Target gross margin
- What it is
- The gross margin your pricing policy requires: gross profit as a percentage of selling price.
- Units and format
- Enter a number in %: percent: the number is read as a percentage, so type 8 for 8 %. The form accepts 0% to 99%.
- Example
- The form opens with 30% as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Sets the pass level and the price needed: price for target = cost ÷ (1 − target).
- Get it right
- Margin is a share of price, not of cost. A 30 % margin is not the same as a 30 % markup.
Method and formulas
- Cost = material + labour + overhead
- Gross margin = (price − cost) ÷ price
- Price for target = cost ÷ (1 − target margin)
Limitations
- Only as complete as the cost entered
- Does not price commercial risk
Typical uses
- Reviewing a quote before it goes out
- Deciding whether to accept a customer’s counter-offer
Who it is for
- Estimators and sales staff
- Managers approving quotes
What you get
- TARGET MET, BELOW TARGET or LOSS
- Margin against target
- Price needed for the target
Interpreting the result
- A quote below target can still be accepted deliberately, but record why
BIZOMAT tools are screening and decision-support utilities. Verify important financial, engineering, safety, legal or operational decisions using appropriate professional standards and your organisation’s approved data.