This article will provide some details how the Proposals are automatically calculated. Adjustments can be made to the proposals by editing any of the default input fields, which will adjust the totals. 

Basics of the Calculation

Below is the basic calculation. Each section will be broken out in further detail below. 

Total Costs = Material Costs + Labor Cost + Equipment Cost + Trucking Cost + Additional Cost/s + Overhead Cost + Indirect Cost + Profit Margin

Material Cost

The cost of Material is calculated using the settings when configuring a product. The Bitumio software will use the Area Coverage Field from the product settings to automatically determine how many units (blocks, gallons, tons) of the product are needed based on the Job size. Bitumio will then multiply the number of units needed by the Product Cost Field to calculate Material Costs.

Labor and Equipment Cost

Labor and Equipment Costs are calculated using two values: 

1. Travel Time
   • In the Organization Settings screen there is a list of Addresses for your Organization. The Primary Address is used to calculate travel distance to the Job and subsequently Travel Time. 
   • Upon entering the Stage Address in the Proposal, Bitumio automatically calculates the Distance and Travel Time between the Job and the Organization's Primary Address. 
2. On-Job Time
   • Within the Product Settings there is a "Daily Units Complete" field. This allows Bitumio to know how much of that Product can be accomplished in a single day and subsequently the hourly completion rate of the Crew. 
   • Once the Job size is entered in the Proposal, Bitumio will automatically calculate how many hours/days the Job will take to complete. 

Once Bitumio has calculated both the Travel Time and the On-Job time, the Hourly Rate for the Crew and Equipment is multiplied by the time values to get the Total Labor and Total Equipment Cost. 

Total Labor Cost = (Travel Time + On-Job Time) x Crew Hourly Rate

Total Equipment Cost = (Travel Time + On-Job Time) x Equipment Hourly Rate

Markup Percentages

Markups are defined at the Product Type level, but can be overwritten within each Product or Proposal. There are three Markups: 

1. Indirect Costs:These are costs that are necessary to do business but are note directly associated to a product or project. These could be fuel, tires, equipment maintenance, etc. 
   • Once all the direct costs are calculated (Material Costs + Labor Costs + Equipment Costs + Additional Costs + Trucking Costs), the Total Direct Costs amount is multiplied by the Indirect Cost percentage as defined within the Product Type.
2. Overhead Costs:These are costs associated to operating the business like rent, utilities, advertising, etc. 
   • Once all the direct costs are calculated (Material Costs + Labor Costs + Equipment Costs + Additional Costs + Trucking Costs), the Total Direct Costs amount is multiplied by the Overhead Cost percentage as defined within the Product Type.
3. Profit Markup: This is the percentage that each Job should be marked up to ensure each Job is profitable. 
   • Once all the direct costs are calculated (Material Costs + Labor Costs + Equipment Costs + Additional Costs + Trucking Costs), the Total Direct Costs amount is multiplied by the Profit Margin percentage as defined within the Product Type.

Final Calculation

The Final Calculation would look something like this: 

Total Cost = Material Cost + Labor Travel Time*Crew Hourly Rate + Labor On-Job Time*Crew Hourly Rate + Equipment Travel Time*Crew Hourly Rate + Equipment On-Job Time*Equipment Hourly Rate + Trucking Cost + Additional Cost/s 


Total Proposal Amount = Total Cost * Overhead Percentage  + Total Cost * Indirect Cost + Total Cost * Profit Margin + Total Cost