MSP Cost Calculator
Work out the monthly cost of running a managed service, per unit served.
What this calculator does
Only entered costs are counted; overhead uses the firm's own rate. No cost per device benchmark is supplied.
Inputs and what they mean
- Currency
- — Amounts are shown in the currency you pick. No exchange rate is applied..
- Monthly service labour cost
- — number value.
- Software, tools and licences (optional)
- — Optional component. Leave at 0 to exclude it from the result..
- Vendor and hardware cost (optional)
- — Optional component. Leave at 0 to exclude it from the result..
- Other direct delivery cost (optional)
- — Optional component. Leave at 0 to exclude it from the result..
- Overhead applied to direct cost (optional)
- — Optional component. Leave at 0 to exclude it from the result..
- Units served (devices, users or sites)
- — number value.
How to use it
- Enter your own figures — the calculator never fills in a rate, price or benchmark for you.
- Press Calculate to see the result.
- Read the formula, variables, assumptions and source below the result before you rely on it.
Formula
Direct cost = Labour + Tools + Vendor + Other; Total cost = Direct cost × (1 + Overhead rate); Cost per unit = Total cost ÷ Units
Worked example
A managed service desk serving 900 devices
Only the cost elements you enter are counted.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
Results depend entirely on the figures you enter and are rounded for display. They are for general information and education, not professional advice.
Reference: Rice University — Principles of Accounting, Volume 2: Managerial Accounting
Last reviewed:
Common questions
Formula, source and verification
Service delivery costs are accumulated, overhead applied, and the total divided by the units served.
The question it answers: What does it cost us each month to run this service, per device or user?
The formula
Direct cost = Labour + Tools + Vendor + Other; Total cost = Direct cost × (1 + Overhead rate); Cost per unit = Total cost ÷ Units
- L — Service labour cost
- (currency). Monthly cost of the people delivering the service.
- S — Tools and licences
- (currency). Optional monthly software cost.
- V — Vendor and hardware
- (currency). Optional monthly vendor cost.
- X — Other direct cost
- (currency). Optional other delivery cost.
- o — Overhead rate
- (%). Overhead applied to direct cost.
- n — Units served
- (count). Devices, users or sites covered.
Units: Currency per month; counts; percentages.
What kind of calculation this is
Deterministic formula. The same inputs always give the same answer. The maths is fixed and does not depend on judgement.
Method
Only entered costs are counted; overhead uses the firm's own rate. No cost per device benchmark is supplied.
Assumptions built into the result
- Mathematical: All costs cover the same month as the unit count.
Figures this calculator will never guess for you
- No industry-average rate, margin, overhead or ticket volume is inserted.
- No optional component is filled in on the user's behalf.
Limitations
- Averages cost across units; heavy and light users cost different amounts to serve.
Source and version
- Standard or reference
- Cost accumulation, cost-plus pricing, margin and markup (OpenStax, Principles of Accounting Volume 2: Managerial Accounting — job order costing, cost-plus pricing, margin and markup.)
- Published source
- Rice University — OpenStax (CC BY)
- Formula version
- Version 1
- Verification
- Reviewed against the cited source on
- How much weight the source carries
- Academic
- Applies to
- Currency
- Amounts stay in the currency you choose; no exchange rate is applied.
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