Many factors lead to reduced profitability including cost overruns, supply chain issues, and other economic impacts. Many contractors experience reduced profitability simply because they don't understand all of the costs in delivering their product or service. We often find missing costs and indirect rate errors, both of which cause inaccurate pricing and reduced profitability. We'll discuss direct cost elements and the application of indirect rates including updates to those rates. We can help you with the calculation and strategy of your rates while ProPricer can help you compile the numbers and develop what-if scenarios for your proposal pricing.
- List the 5 direct cost elements.
- Describe the difference between actual and standard costs.
- Explain the importance of updating indirect rate budgets.
- Identify the need for a new indirect rate strategy.