# How Part Costs Are Calculated

### Overview

When you're creating estimates with Clear Estimates, the cost of the project is calculated by adding up the costs of each part in your project. So when you want to add or edit the cost of your estimate, you'll need to start with your parts! In this article, we'll walk through the different ways you can calculate the cost of a part!

Within each part, you can break down the costs even further by putting them into different buckets for Material Costs, Labor Costs, or Subcontractor Costs. Each part can have costs in any combination of those buckets, so one part could have costs in the Material and Subcontractors buckets but nothing for Labor. Its entirely up to you!

### Cost Calculation Options

For each of the different cost buckets, you can calculate the cost of a part depending on the situation. You can customize each part to calculate costs the way you want or however makes the most sense to you. Let's take a look at some of the cost calculations you can use when creating your estimates!

\$/unit - This one you're sure to have used before! A very simple calculation where you enter the cost per unit (square footage, linear footage, etc.).

How the \$/Unit Calculation Works

Lump Sum - Another very simple option. Want to charge a flat fee for labor or material, regardless of the quantity for this part? No problem! Just enter how much you want and the software will do the rest!

How the Lump Sum Calculation Works

Hours per Unit - Great for when you know how many hours a single unit is going to take you, such as 2 hours to install a window. Just enter the hours for each unit and the labor rate to use! This is only available in the "Labor Cost" and "Subcontractor Cost" buckets.

How the Hours/Unit Calculation Works

Hours - Similar to the Lump Sum, it's great for when you want to charge a flat fee or rate. This time though, all you need to know is the number of hours! Select which labor rate to use and that's how much you'll charge! This is only available in the "Labor Cost" bucket.

How the Hours Calculation Works

If you want to Calculate "Labor Hours" Accurately

When you are using any of these calculations for the Labor Cost bucket, you can also enter a labor rate to approximate the number of labor hours for the part.

For example, if you enter a \$500 lump sum labor cost and a \$50/hr labor rate, the software will calculate 10 labor hours.

### Markup

Above we've discussed how you can calculate the cost of your parts in a variety of different ways so that the estimate comes out how you like! But, you can also easily adjust the markup that you're charging on top of your costs.

Normally, your markup is set by your project markup. But you can also set your markup specifically for each part. To do that, just click on "Markup" in the cost bucket (material, labor, or subcontractor) that you want to change the markup for. Then, enter the percentage markup you want to use!

Customize Markup for One Line-Item

### How-To Examples

Want to charge your customer a \$/unit for labor?

Charge Your Customer a \$/unit for Labor

Want a custom markup for a particular line item?

Customize Markup for One Line-Item

Need to set up a budget or allowance?

Create an Allowance or Budget

Want to charge the customer for a flat number of labor hours?

Charge a Flat Rate for Labor

You’re buying the material and a subcontractor is installing it?

Using a Subcontractor for Installation 