STEP 01
List the included costs first
Start with equipment, parts, technician labor and employer burden, travel and other costs attributable to the job. Use your own supplier and labor data. Keep separate accounting of taxes, permits and other obligations according to the job and the rules that apply.
STEP 02
Markup is calculated from cost
With $900 in estimated included costs and a 30% markup, the formula is Price = Cost × (1 + markup). So $900 × 1.30 = $1,170. The $270 difference is 30% of the $900 cost.
STEP 03
Margin is calculated from selling price
A 30% target margin means the included cost should represent 70% of the final selling price. Use Price = Cost ÷ (1 − target margin). At $900 cost, $900 ÷ 0.70 ≈ $1,285.71.
The $1,170 markup quote only has about 23.08% margin against the included $900 cost, because $270 ÷ $1,170 ≈ 0.2308.
STEP 04
Recheck after discounts and changes
When a customer requests a discount or approves a change order, recompute the expected price and cost. For completed jobs, compare recorded actual technician hours and materials against the estimate to see where assumptions diverged.
STEP 05
Understand what the spreadsheet cannot do
Estimating math is not system sizing, a Manual J calculation, a regulatory approval or a substitute for qualified HVAC design work. The final quote and technical scope must reflect real requirements.