Support Contract Pricing Calculator
Price a support contract from ticket volume and handling time.
What this calculator does
Ticket volume and handling time come from the firm's own records. No benchmark ticket rate or handling time is supplied.
Inputs and what they mean
- Currency
- — Amounts are shown in the currency you pick. No exchange rate is applied..
- Tickets expected each month
- — number value.
- Average handling minutes per ticket
- — number value.
- Loaded cost per support hour
- — number value.
- Monthly tooling and licence 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..
- Pricing method
- — Margin is a share of the price. Markup is an addition to cost. They are not the same number..
- Margin or markup
- — 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
Support hours = Tickets × Minutes per ticket ÷ 60; Cost = (Support hours × Loaded rate + Tooling) × (1 + Overhead rate); Price = Cost ÷ (1 − Margin) or × (1 + Markup)
Worked example
300 tickets a month at 25 minutes each
Every rate and volume is entered; no benchmark ticket time is assumed.
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
Expected demand is converted into staffed hours, costed, loaded with overhead, then priced by the chosen method.
The question it answers: What should a support contract cost given the tickets we expect?
The formula
Support hours = Tickets × Minutes per ticket ÷ 60; Cost = (Support hours × Loaded rate + Tooling) × (1 + Overhead rate); Price = Cost ÷ (1 − Margin) or × (1 + Markup)
- T — Tickets per month
- (count). Expected monthly ticket volume.
- t — Minutes per ticket
- (min). Average handling time, measured by the firm.
- r — Loaded cost per support hour
- (currency/h). Employer cost per staffed support hour.
- S — Tooling cost
- (currency). Optional monthly tooling and licence cost.
- o — Overhead rate
- (%). Overhead applied to direct cost.
- m — Margin or markup
- (%). Profit applied by the chosen method.
Units: Counts; minutes; currency per hour; percentages.
What kind of calculation this is
Business input model. The answer depends on business figures only you can supply, such as your own costs, rates or volumes. No market or benchmark values are assumed for you.
Method
Ticket volume and handling time come from the firm's own records. No benchmark ticket rate or handling time is supplied.
Assumptions built into the result
- Mathematical: Average handling time represents the mix of tickets expected.
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.
- No industry ticket volume or handling time is inserted.
Limitations
- Uses an average handling time; volatile or seasonal demand needs its own scenario.
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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