Build bill of materials with component costs, labor, overhead allocation, and total unit cost with margin analysis.
This tool turns a bill of materials into a per-unit cost. List each component with its unit price, add direct labor as minutes at an hourly rate, and pick an overhead method - a percentage of direct labor or a flat per-unit charge - and the tool rolls the three layers up into a total unit cost. Enter a target price and it reports gross profit per unit, margin, and markup on cost. The surprise: margin and markup never match. At the example's numbers, a 50% markup on cost is a 33.4% margin, and treating the two as the same is the most common pricing mistake.
A concrete input and expected output from the current implementation.
Input
Desk Lamp Kit - per unit Enclosure: 4.50 LED board: 6.00 Power supply: 3.20 Hardware: 0.80 Packaging: 0.90 Labor: 12 min/unit at 18.00/hr Overhead: 120% of direct labor Price: 34.99
Expected output
Component subtotal: $15.40 Labor (12 min at $18.00/hr): $3.60 Overhead (120% of labor): $4.32 Total unit cost: $23.32 Gross profit at $34.99: $11.67 Margin: 33.4% Markup on cost: 50.0%
The three layers roll up separately: 15.40 + 3.60 + 4.32 = 23.32, and 34.99 - 23.32 = 11.67. Margin divides profit by price (11.67 / 34.99 = 33.4%) while markup divides by cost (11.67 / 23.32 = 50.0%), which is why the two differ.
Each component line contributes a per-unit price; quantities above one multiply the unit price before summing. Labor is entered as minutes and an hourly rate, converted to cost per unit (minutes divided by 60, times the rate). Overhead applies either as a rate on direct labor or a flat per-unit amount. The three subtotals - components, labor, overhead - add to total unit cost.
With a price entered, the tool computes gross profit per unit (price minus total unit cost), margin (gross profit divided by price, shown as a percentage), and markup on cost (gross profit divided by cost). Because margin divides by price and markup divides by cost, the two never match: a 50% markup yields a 33.4% margin at the numbers in the example.
Only if you enter them. The tool sums what is in the BOM: component costs, labor, and the overhead you specify. Freight per unit and amortized tooling (a one-time cost divided by expected volume) can be added as component lines, but nothing is assumed for you - unlisted costs stay out of the total.
Mostly allocation and definitions. The accountant may include selling costs, R&D, or different overhead pools; this tool covers the factory-level cost - components, direct labor, allocated overhead - and nothing after that. It is a product-cost floor, not a full P&L, and the difference is expected, not a bug.
The example and behavioral notes were checked against the browser implementation. Standards and primary references below define the relevant format, formula, or platform behavior.
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