Cost Markups
EAM's Cost Markup feature enables agencies to apply additional charges or overhead costs to a Work Order > Task > Resource (i.e., Employees, Equipment, Contractors, Materials, and Fluids).
By applying Cost Markups, an agency can determine the real cost of using a resource on a Work Order and distribute that cost among related assets.
- Types of Cost Markups
Cost Markups can be factored using one of the following methods:
- Percentage - Applies a set percentage of the resource's cost to the total cost for using that resource. Calculated as: (Percentage/100) x Default Unit Cost on Resource Record x Units.
Fixed Rate - Applies a set amount to the total cost for using that resource.
- on Subtotal - Adds a set amount of money to the cost of using the resource every time that resource is used on a Work Order.
- on Unit - Adds a set amount of money to the cost of using the resource for every Unit of work recorded for that resource on the Work Order.
Additionally, users can identify a Not To Exceed value to set a limit on a Cost Markup applied to a Work Order Resource.
Example
An employee makes $10 an hour; however, the agency has to pay taxes and insurance on top of his hourly rate. To track these costs, an administrator creates two Cost Markup records:
- one to apply a 2 percent tax rate, and
- one to apply $3 dollars per a hour for health insurance.
The employee is on-call and the agency must pay a $10 charge to the employee to use the employee outside of regular hours. So, a third Cost Markup is applied to his Employee Resource record on the Work Order.
The employee works 5 hours on a Work Order Task.
- Base Pay: $10 x 5 hours = $50
- Taxes: $10 x 2% x 5 hours = $1
- Insurance: $3 x 5 hours = $15
- Surcharge: $10
- Total Cost = $76
- Not To Exceed = $70
So, while the employee is paid $60 for his work, the total cost to the agency is $76.
However, the Cost Markup's Not To Exceed value was set at $70, so the Cost Markup applied to this Employee Resource on the Work Order will be $70.
Cost Markup Setup
Users apply Cost Markups by adding them to the Cost Markup grid for the desired Resource record. However, agencies can create standardized groups of Cost Markups in the Work > Administration > Cost Markup Library. These groups then can be loaded into a Work Order Task Resource's Cost Markup grid.
Cost Markups may be applied to any type of Work Order Resource. However, on Employee or Equipment records, Cost Markups only apply to calculations for the Normal Time/Cost fields.
Users can apply Cost Markups to Work Order Resources in a number of ways:
- Create a single Cost Markup to add to a single Work Order Resource.
- Create a single Cost Markup to add to several Work Order Resources of the same type.
- Load an existing set of Cost Markups (from a Library) to one or more Work Order Resources of the same type.
Note, however, that Markups cannot be permanently tied to a Resource. Users must apply Markups to Resources on individual Work Orders.