Lake Martin Topics: my take on cost

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	Name:	itisd -
	Subject:	my take on cost
	Date:	1/28/2009 11:01:56 PM

The 10% to 13% builder profit that has been quoted is not accurate in my opinion. What I have found on cost plus jobs is that the builder bugets the hard cost for building material and the labor cost and labor burden. Lets say that this comes to $400,000. I have found that to this figure the builder tacks on or adds his overhead. If that builders annual overhead percentage is say 18% based on his annual volumn , he then adds 18% to the $400,000 which now becomes $472,000. Then at the end of the job he is due his 10% profit which is $47,200.
He is not just making 10% but much more than that. His annual salary, superintendent salary, office cost, truck cost, cell phone cost etc is all that makes up the term overhead.