From purchased boards to a clear quote

This synthetic job uses USD to make the arithmetic inspectable. The prices, rates and tax settings are examples; enter your own currency, supplier prices and applicable tax basis.

1. Cost the stock you purchase

Four confirmed 1,000 mm blanks fit on two 2,400 mm boards, two blanks per board. With 3 mm kerf and 5 mm at each end, each board consumes 2,016 mm and leaves 384 mm. At USD 14.00 per board, the material purchase is USD 28.00.

Purchased length is 4,800 mm: 4,000 mm in finished blanks, 32 mm of kerf/end loss and 768 mm of offcuts. The USD 28.00 already pays for all of it. Adding a second “waste cost” would charge the same purchase twice.

2. Build the pricing budget

The USD 30.00 hourly figure is a cost rate, not an hourly customer selling rate. Overhead is added once. If you add a contingency, keep it visible as a planned reserve; it becomes an actual cost only when money is spent and recorded.

3. Set margin deliberately

A 25% target margin means price = 260 ÷ (1 − 0.25) = 346.666… . Rounding the final price once to cents gives USD 346.67 pretax. Planned profit against the budget is 346.67 − 260.00 = USD 86.67. Its displayed margin rounds to 25.00%; equivalent markup rounds to 33.33%.

A 25% markup would give 260 × 1.25 = USD 325.00 and USD 65.00 of planned profit. That is a 20% margin. The percentages are not interchangeable.

4. Keep tax separate

Tax starts off. For this arithmetic example only, suppose you explicitly select a tax-exclusive taxable amount of USD 200.00 and a rate of 10%. Tax is 200.00 × 0.10 = USD 20.00. The customer total is 346.67 + 20.00 = USD 366.67.

The selected taxable amount does not imply that materials, labor or the whole quote are legally taxable. Confirm the rules that apply to your transaction. Collected tax is excluded from pretax revenue, profit and margin.

5. Review the customer document

Describe the agreed work, inclusions, exclusions and validity dates. Review the customer-facing sell prices and total before exporting. Supplier prices, labor cost rates, internal margins, actuals and private notes are excluded from the customer document model. A workshop plan and a full backup serve different purposes and contain more information.

6. Compare the completed job

Suppose the completed job has recorded actual costs of USD 360.00 and actual pretax revenue of USD 400.00 after an agreed scope change. Actual job profit is USD 40.00; actual margin is 10%. Record the change and keep the original quote snapshot.

Higher revenue did not mean higher profit. These figures include only the costs you recorded; they do not establish whole-business net profit. Review extra hours, purchases and omitted expenses before using the job to inform the next estimate.

Build a local job and quote · Check margin and markup