PREVNEXTSUBMITMenuResourcesGlossaryNotesClear and return to MenuSearch ResultsFilterSlide TextNotesSearch in:Check to includeSearch...TermsDefinitiondefinitionresourcessearchpauseplayreplaysubmitnextpreviousvolume<html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>There are a number of indirect costs associated with managing a work order, such as the wages, rent, computer systems and other expenses associated with running a business. In order to accurately assess the true cost of the work order, we estimate the amount of these indirect costs and charge them to the work order. The charge for indirect expenses is what we call allocation. </textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>When we dispatch a technician to perform work, we are going to pay for labor, material and equipment to complete a job. These costs will require us to pay cash directly to our vendors, and those costs will be charged to the work order. These are what we call Direct Costs - they are costs directly associated with completing the work order. </textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>Wages, rent, computer systems and other expenses associated with running a business.</textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>Margin is the difference between selling price and cost. This difference is typically expressed as a percentage of the selling price.</textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>Markup is the difference between the cost of a good or service and its selling price. A markup is added on to the total cost incurred by the producer of a good or service in order to create a profit. Markup can be expressed as a fixed amount or as a percentage of the total cost.</textformat></html>