The method of calculating the maximum bid limit price depends mainly on the specific project and requirements. Generally speaking, if the goods or services procured adopt a cost model, that is, the materials and equipment are directly provided by **, and the contractor is selected through bidding for construction or services, then the maximum bid limit can be calculated according to the cost model. Specifically, the calculation formula is: maximum bid limit = cost + profit.
Among them, "cost" refers to the estimated cost of materials, equipment, manpower, etc., and "profit" is the expected benefit of the contractor. In addition, depending on the situation, the float factor can also be considered. The float coefficient is determined by the bidder's representative or on-site supervisor at the first envelope opening site from the six numbers of %.
The difference between cost and profit is mainly reflected in the following aspects:
The concept is different: cost is the value category of the commodity economy, and it is a component of the value of the commodity. In order for people to carry out production and operation or achieve certain goals, they must consume certain resources (human, material and financial resources), and the monetary performance of the resources they spend and their objectification are called costs. Profit refers to the operating results of an enterprise in a certain accounting period, which is the balance of the income realized by the enterprise in a certain accounting period minus expenses, and the profit of the enterprise does not include costs.
The purpose is different: profit is a comprehensive reflection of the business effect of the enterprise, and it is also the concrete embodiment of its final results. The enterprise has a certain profitability, the profit structure is basically reasonable, and the profit has a strong ability to obtain cash. Cost is the value category of the commodity economy and is a component of the value of the commodity. In order for people to carry out production and operation or achieve certain goals, they must consume certain resources (human, material and financial resources), and the monetary performance of the resources they spend and their objectification are called costs.
Different influencing factors: The size of the profit depends on many factors, including the market environment, industry trends, company strategy, personnel quality, etc. The size of the cost depends mainly on the amount of resources required for production or service and the unit cost.
The calculation method is different: the calculation method of profit is usually calculated by subtracting the total cost from the total revenue. The calculation method of cost is based on the specific production or service process, including direct material costs, direct labor costs, manufacturing expenses, etc.
In short, cost and profit are two different concepts, and they both play an important role in the production and operation activities of enterprises. Understanding the differences between them can help you better understand how your business is doing and how financially it is performing.
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