### APPENDIX 5A. DETAILED DATA FOR EQUIPMENT PRICE MARKUP S

TABLE OF CO NTENTS

5A.1 DETAILED WHOLESALER COST DATA

........................................................... A-1

5A.2 DETAILED MECHANICAL CONTRACTOR DATA

........................................... A-2

5A.3 DETAILED GENERAL CON TRACTOR COST DATA

........................................ A-3

5A.4 STATE SALES TAX RATE S .................................................................................. A-5

LIST OF TABLES

Table 5A.1.1 Disaggregated Costs and Expenses for Wholesalers .................................... A-1

Table 5A.2.1 Mechanical Contractor Expenses and Markups Used To Scale the

Incremental Markups .................................................................................... A-3

Table 5A.3.1 General Contractor Expenses and Markups .................................................. A-4

Table 5A.4.1 State Sales Tax Rates (Percent) .................................................................... A-5

5A-i

### APPENDIX 5A. DETAILED DATA FOR EQUIPMENT PRICE MARKUPS

5A.1 DETAILED WHOLESALER COST DATA

Based on data provided by the Heating Air-conditioning & Refrigeration Distributors

International (HARDI), Table 5.6.1 of chapter 5 shows wholesaler revenues and costs in

aggregated form. 1 

### Table 5A.1.1 below provides the complete breakdown of costs and expenses

. The column labeled “Scaling” in Table 5A.1 .1 indicates which expenses the U.S. Department of

Energy (DOE) assumed to scale with only the baseline markup and which with both the baseline

and incremental markups. As described in chapter 5, section 5.5, only those expenses that scale

with both base line and incremental costs are marked up when there is an incremental change in

equipment costs.

Table 5A.1.1 Disaggregated Costs and Expenses for Wholesalers

Item Percent of Revenue

% Scaling

Cost of Goods Sold 73.7

Gross Margin 26. 3

Payroll Expenses 1 5.1 Baseline

Executive Salaries & Bonuses 1.7

Branch Manager Salaries and Commissions 1. 5

Sales Executive Salaries & Commissions 0.5

Outside Sales Salaries & Commissions 2. 1

Inside/Counter Sales/Wages 2. 8

Purchasing Salaries/Wages 0. 4

Credit Salaries/Wages 0. 2

IT Salaries/Wages 0. 1

Warehouse Salaries/Wages 1. 4

Accounting 0.5

Delivery Salaries/Wages 0. 7

All Other Salaries/Wages & Bonuses 0. 8

Payroll Taxes 1. 0

Group Insurance 1. 1

Benefit Plans 0. 3

Occupancy Expenses 3. 6 Baseline

Utilities: Heat, Light, Power, Water 0.4

Telephone 0.3

Building Repairs & Maintenance 0.2

Rent or Ownership in Real Estate 2. 7



### 5A-1

### Table 5A.1.1 Continued Disaggregated Costs and Expenses for Wholesalers

Other Operating Expenses 5. 5 Baseline & Incremental

Advertising & Promotion 0. 9

Insurance (business liability & casualty) 0.2

Depreciation 0.4

Vehicle Expenses 1.4

Personal Property Taxes/Licenses 0.1

Collection Expenses 0.3

Bad Debt Losses 0.3

All Other Operating Expenses 1.7

Total Operating Expenses 24.2

Operating Profit 2.1 Baseline & Incremental

Other Income 0. 4

Interest Expense 0. 5

Other Non

- operating Expenses 0.0

Profit Before Taxes 2.0

Source: Heating, Air

- conditioning & Refrigeration Distributors International. 201 2 . 201 2 Profit Report (20 10 d ata).

Note: The wholesaler costs and expenses are percentage values as opposed to the per

- dollar of sales revenue values shown in Table 6. 6 .1.



### 5A.2 DETAILED MECHANICAL CONTRACTOR DATA

Tables 5.6.2, 5.6.3, and 5.6.4 of chapter 5 provide mechanical contractor revenues and

costs in aggregated form by ‘Cost of Goods Sold’ and ‘Gross Margin.’ The tables are based on

data in the 2005 edition of Financial Analysis for the HVACR Contracting Industry, published

by the Air Conditioning Contractors of America (ACCA). 2 

### The ACCA report did not provide a

more disaggregate tabulation of these costs and expenses. T he gross margin category was

assumed to scale only with the baseline markup.

The more disaggregated breakdown of costs used to scal e the incremental markup are

shown in Table 5A.2.1 , presented in both dollar value and percentage terms from the 2007

Economic Census. 3 

### As the ACCA data were used to calculate the base line markup, in Table

5A.2.1 only the categories in the ‘Scaling’ column that scaled with both the baseline and

incremental markups are marked when there is an incremental change in equipment costs.

5A-2

### Table 5A.2.1 Mechanical Contractor Expenses and Markups Used To Scale the Incremental

Markups

Item Dollar Value

$ 1000 Percentage

% Scaling

Total Cost of Equipment Sales 107,144,428 67.80

Cost of materials, components, and supplies 59,023,964 37.35

Payroll, construction workers 31,373,558 19.85

Cost of construction work subcontracted out to others 13,646,192 8.64

Cost of selected power, fuels, and lubricants 3,100,714 1.96

Gross Margin 50,895,129 32.20

Payroll Expenses 27,626,376 17.48 Baseline

Fringe benefits, all employees 13,585,040 8.60

Payroll, other employees 14,041,336 8.89

Occupancy Expenses

Rental cost for machinery, equipment, and buildings +

Cost of repairs to buildings and other structures +

Purchased communication services 3,436,208 2.17 Baseline

Other Operating Expenses 6,165,776 3.90 Baseline &

Incremental Depreciation charges during year 2,297,550 1.50

Computers + Insurance and other business services +

Advertising and Promotions + Taxes and License Fees 3,868,226 2.40

Net Profit Before Income Taxes 13,666,769 8.60 Baseline &

Incremental

Source: U.S. Census Bureau. 2007. Plumbing, Heating, and Air

- Conditioning Contractors: 2007. Sector 23: 238220. Construction: Geographic

Area Series. Detailed Statistics for Establishments: 2007.

Note: Mechanical contractor costs and expenses are first presented as total dollar values and then converted to percentage val ues.



### 5A.3 DETAILED GENERAL CON TRACTOR COST DATA

Based on U.S. Department of Census data, Table 5.6.8 of chapter 5 shows general

contractor revenues and costs in aggregated form. Table 5A.3.1 below shows the complete

breakdown of costs and expenses provided in the 2007 Economic Census. 4 

### The column labeled

“Scaling” in Table 5A.4.1 indicates which expenses DOE assumed to scale with only the

baseline markup and which scaled with both the baseline and incremental markups. Only those

expenses that scale with baseline a nd incremental costs are marked up when there is an

incremental change in equipment costs.

5A-3

### Table 5A.3.1 General Contractor Expenses and Markups

Item Dollar Value

$1000 Percentage

% Scaling

Total Cost of Equipment Sales 250,657,006 76.24

Total payroll, construction workers wages 16,449,830 5.00

Cost of materials, components, and supplies 74,148,280 22.55

Cost of construction work subcontracted out to others 157,873,840 48.02

Total cost of selected power, fuels, and lubricants 2,185,056 0.66

Gross Margin 78,113,967 23.76

Payroll Expenses 25,948,454 7.89

Baseline Total payroll, other employees wages 16,652,791 5.07

Total fringe benefits 8,666,079 2.64

Temporary staff and leased employee expenses 629,584 0.19

Occupancy Expenses 3,301,046 1.00

Baseline

Rental costs of machinery and equipment 1,403,979 0.43

Rental costs of buildings 1,045,163 0.32

Communication services 385,109 0.12

Cost of repair to machinery and equipment 466,795 0.14

Other Operating Expenses 10,770,620 3.28

Baseline &

Incremental Purchased professional and technical services 1,121,644 0.34

Data processing and other purchased computer services 127,031 0.04

Expensed computer hardware and other equipment 219,601 0.07

Expensed p urchases of software 67,977 0.02

Advertising and promotion services 290,239 0.09

All other expenses 6,321,197 1.92

Refuse removal (including hazardous waste) services 233,831 0.07

Taxes and license fees 807,872 0.25

Total depreciation ($1,000) 1,581,228 0.48

Net Profit Before Income Taxes 38,093,847 11.59 Baseline &

Incremental

Source: U.S. Census Bureau. 2007. Commercial and Institutional Building Construction. Sector 236220 . Construction, Industry Series,

Preliminary Detailed Statistics for Establishments: 2007.

Note: G eneral contractor costs and expenses are first presented as total dollar values and then converted to percentage values.



### 5A-4

### 5A.4 STATE SALES TAX RATE S

Table 5A.4.1 State Sales Tax Rates (Percent)

State Combined

State and Local

Tax Rate State Combined

State and

Local Tax Rate State Combined

State and

Local Tax Rate

Alabama 8.55% Louisiana 8.75% Ohio 6.80%

Alaska 1.35% Maine 5.00% Oklahoma 8.35%

Arizona 8.15% Maryland 6.00% Oregon 0.00%

Arkansas 8.35% Massachusetts 6.25% Pennsylvania 6.40%

California 8.40% Michigan 6.00% Rhode Island 7.00%

Colorado 6.15% Minnesota 7.20% South Carolina 7.10%

Connecticut 6.35% Mississippi 7.00% South Dakota 5.40%

Delaware 0.00% Missouri 6.60% Tennessee 9.45%

Florida 6.65% Montana 0.00% Texas 7.95%

Georgia 7.10% Nebraska 6.00% Utah 6.70%

Hawaii 4.40% Nevada 7.85% Vermont 6.05%

Idaho 6.05% New Hampshire 0.00% Virginia 5.00%

Illinois 8.05% New Jersey 6.95% Washington 8.90%

Indiana 7.00% New Mexico 6.60% West Virginia 6.05%

Iowa 6.85% New York 8.40% Wisconsin 5.45%

Kansas 8.00% North Carolina 6.85% Wyoming 5.35%

Kentucky 6.00% North Dakota 5.90%

Source: The Sales Tax Clearinghouse at https://thestc.com/STRates.stm (A ccessed on February 2013 )



### 5A-5

### REFERENCES

1. Heating Air Conditioning & Refrigeration Distributors International, 2012 Profit Report

, 2012. < http://www.hardinet.org/Profit-Report >

2. Air Conditioning Contractors of America, 2005 Financial Analysis for the HVACR

Contracting Industry , 2005.

3. U.S. Census Bureau, Plumbing, Heating, and Air-Conditioning Contractors. Sector 23:

238220. Construction: Industry Series, Preliminary Detailed Statistics for

Establishments, 2007. , 2007.

4. U.S. Census Bureau, Construction: Industry Series: Preliminary Detailed Statistics for

Establishments: 2007. Commercial and Institutional Building Construction. , 2007.

5A-6