Letters

SEPTEMBER JLC 1998 More Markup Math To the Editor: I appreciate Sal Alfano's explanation of gross profit (Strictly Business, 7/98). There is another way to calculate markup that avoids the confusing "subtract from 1 and divide by the remainder" math. You calculate overhead costs the same as usual: Add up all costs that can't be applied to a specific job, including your time spent off the job site, office costs, vehicles, marketing and so on. Then calculate the total direct, or "hard," costs for all jobs in the same time period — your time on the site, labor, materials, subs, and miscellaneous costs. All costs for the period should be included, either as overhead or as a hard cost. Divide