Finance Tools
Material Cost Overrun Impact Calculator
Calculate how a material cost overrun impacts total project cost, profit, and required price adjustment to maintain the target margin.
Estimate how a material cost overrun affects total cost, profit, and margin— helpful for construction and manufacturing projects.
Total revenue for the project (or annual contract).
Baseline material budget before overrun.
Labor, equipment, overhead, subcontractors, etc.
Use this for inflation-driven overruns.
Material cost
Overrun value: $50,400
New material cost: $470,400
Profit & margin
Profit: $230,000 → $179,600
Margin: 15.33% → 11.97%
Revenue needed to keep original margin (simple)
Required revenue: $1,559,528
Required increase: $59,528 (3.97%)
Tip: Use percent mode for inflation scenarios and amount mode for specific change orders.
How it works
- Overrun adds to planned material cost (percent or fixed amount).
- New profit = revenue − (new material cost + other costs).
- Required revenue keeps your original margin constant (simple estimate).
FAQ
Percent vs amount—when should I use each?
Percent is best for inflation scenarios; amount is best for change orders with known values.
Does this include schedule delays?
No. This tool focuses on cost overruns. Use a delay cost tool for time-driven overruns.
How to use this material cost overrun impact calculator
- Enter project revenue (or contract price), planned material cost, and other project costs.
- Enter expected material overrun percentage or overrun amount.
- Review updated total cost, profit, and margin after the overrun.
- See the required revenue increase to keep your original target margin.
Example
A project has $1,500,000 contract revenue, $420,000 planned material cost, and $850,000 other costs. Materials overrun by 12%.
- New material cost = 420,000 × 1.12 = 470,400
- Total cost increases by 50,400
- Profit and margin are recalculated under the same contract revenue
- Required revenue increase is estimated to keep the original margin
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