About Material Rate Break Points
Rate break points allow you to define one or more levels of discount or markup rates for materials used on work orders.
You can set up material rate break points in one of two places:
SM Rate Override Material - You will set up rate break points here if you need differing levels of overrides to the standard markup/discount rate specified on the rate template for materials.
SM Override Category Material - You will set up rate break points here if you override markup/discount rates by category or material, and you need differing levels of overrides to the standard markup/discount rate specified for selected categories or materials.
- If you select Total Cost, the break point values represent the total dollar amount levels used to determine a discount or markup rate (depending on the rate type).
- If you selected Unit Cost, the break point values represent the unit cost levels used to determine a discount or markup rate
Basis: Actual Cost
Break Points By: T-Total Cost
You set up your break points as follows:
|Break Point Value||Percent|
You then enter a material work completed line with a unit cost of $2.60 and a quantity of 100 (for a Total Cost of $260.00). The system compares the material's actual unit cost to the Break Points table and determines that it falls between the 2.50000 and 3.00000 break point values. Therefore, it uses the rate of 3.5% when calculating the billable rate for the material:
$260.00 + (260.00 x .035) = 269.10
269.10 ÷ 100 = 2.6910 (billable rate)
The calculation will differ slightly depending on the basis you selected for material rates. For example, if you select Last Cost as the rate basis and your Last Unit Cost for the material was $2.45, the system compares the last unit cost to the Break Points table to determine the rate to use. In this case, since $2.45 falls between the 2.00000 and 2.50000 break points, the system uses the rate of 3.0% when calculating the billable rate for the material as follows:
(2.45 x 100) + (245.00 x .030) = 252.35
252.35 ÷ 100 = 2.5235 (billable rate)