# How Part Costs Are Calculated

### Overview

In Clear Estimates, the cost of your project is calculated by adding up each individual item in your estimate. When you want to change your project's cost, 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!

Each part has three cost buckets - **Material Cost**, **Labor Cost**, and **Subcontractor Cost**. Each part can have costs in any combination of those buckets - so, one part could have Material and Subcontractor cost, while another could be Labor cost only. Its entirely up to you!

### Cost Calculation Options

Within each cost bucket, you can calculate your cost a number of different ways. You can customize each part to calculate costs the way that makes the most sense to you! Let's take a look at the different calculation options you have when creating your estimates!

**$/unit** - This is 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 (i.e. 2 hours to install a window). Just enter the number of hours for each unit, and choose a labor rate! This is only available in the "Labor Cost" and "Subcontractor Cost" buckets.

**How the Hours/Unit Calculation Works**

**Hours **- Similar to 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! Simply select a labor rate, and add in the number of hours to 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 discussed how you can calculate your parts in a variety of different ways. On top of those costs, you can also easily adjust the markup that you're charging!

Normally, your markup is determined by your project markup. However, you can also set individual markups for different parts! To do that, just click on "Markup" in the cost bucket (material, labor, or subcontractor). 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?*

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

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

**Using a Subcontractor for Installation**