Work out cost breakdown analysis instantly with clear inputs, formula shown and shareable results.
A cost breakdown request lets you compute the implied margin and test whether the declared structure is plausible. A high material share limits how much negotiation can achieve on labour and overhead, and points instead to design change or joint sourcing of raw material.
Declared cost
Declared cost = Material + Labour + Overhead
Implied margin
Implied margin % = (Quoted price - Declared cost) / Quoted price x 100
Often in a long-term relationship or where it is a tender condition. Open-book arrangements make it contractual.
Negotiation on price will achieve little. Focus on specification change, alternative materials, or buying the raw material yourself and free-issuing it.