Calculating Total Booked Margin with Multiple Percentages

Craig Garrison

I'm trying to calculate the total margin with an original booked margin on a project with a change order booked at a different booked margin.

Project Steve booked at 50% margin, CO1 booked at 25%. Combined, what would the Current Booked Margin be? How would I write the formula for this?

Julie Fortney

How do you define your Current Booked Margin? Is it the average margin percentage for all contract items? Is it weighted by the contract amount of the contract item?

I would define Current Booked Margin as the total margin on all contract items combined. Let's say your original contract cost is $1,000. The calculated margin is $500. CO1 cost is $500, with a calculated margin of $125.

Your total contract cost is $1,500, with a total margin of $625. To get the total margin percentage, I would take 625/1500, which is .42 or 42%.

That's just one way of thinking about it, though.