### APPENDIX 6-A. DETAILED DATA FOR PRODUCT MARKUPS

TABLE OF CONTENTS

6-A.1 INTRODUCTION ................................................................................................. 6-A-1

6-A.2 DETAILED RETAILER DATA ........................................................................... 6-A-2

6-A.3 DETAILED DISTRIBUTOR DATA .................................................................... 6-A-2

6-A.4 DETAILED BUILDER DATA ............................................................................. 6-A-3

6-A.5 MARKUP VALIDATION DATA ........................................................................ 6-A-4

LIST OF TABLES

Table 6-A.2.1 Disaggregated Costs and Expenses for Retailers (1997$) .........................6-A-2 Table 6-A.3.1 Disaggregated Costs and Expenses for Distributors..................................6-A-3 Table 6-A.4.1 Disaggregated Costs and Expenses for Builders (2002$)..........................6-A-4 Table 6-A.5.1 Water Heater Markup Validation (Prices in 2007$)..................................6-A-5

6-A-i

### APPENDIX 6-A. DETAILED DATA FOR PRODUCT PRICE MARKUPS

6-A.1 INTRODUCTION

This appendix provides further details on the retailer, distributor, and builder markups and markups validation presented in chapter 6, Markups to Determine Product Cost. For retailers and distributors, DOE presents a breakdown of revenues and expenses (previously presented in chapter 6 in an aggregated form). DOE identified expenses which scale with direct “labor” costs (such as payroll) and “all costs” (such as advertising). The sum of all expenses that scale with “all costs” is the non-labor-scaling costs (NLSC) used for incremental markup calculations in chapter 6. For builders, DOE presents the by-state sales, payroll, sub-contract, and cost of materials data used to estimate the baseline and incremental builder markups presented in chapter 6. For the markups validation, DOE presents an example of the validation calculation for 40 gallon gas-fired storage water heaters.

6-A-1

### 6-A.2 DETAILED RETAILER DATA

Table 6-A.2.1 shows the complete breakdown of costs and expenses for retailers, as

1 

### provided by the U.S. Census Bureau.

Table 6-A.2.1 Disaggregated Costs and Expenses for Retailers (1997$)

Item Million Dollars Sales (revenue) Cost of Goods Sold (CGS) Gross Margin (GM) 10343

7151

3192 Labor Scaling Costs Payroll 1366 Fringe Benefits 208

Contract Labor 69

Taxes and License Fees 53 Lease and Rental Payments 264 Telephone and Communications 58

Utilities 70 Repair and Maintenance 36 Total Labor Scaling Costs 2124 Non-Labor Scaling Costs Computer and Office Supplies 37 Advertising Services 274 Legal Services 8 Accounting, Auditing and Bookkeeping 19 Computer Services 10 Depreciation and Amortization Charges 94 Other Operating Expenses 363

Net Profit Before Taxes 263 Total Non-Labor Scaling Costs 805 Baseline Markup Incremental Markup 1.45

1.15

6-A.3 DETAILED DISTRIBUTOR DATA

Table 6-A.3.1 shows the complete breakdown of costs and expenses for distributors, as

1 

### provided by the U.S. Census Bureau.

6-A-2

### Table 6-A.3.1 Disaggregated Costs and Expenses for Distributors

Item Electrical Goods

Merchant Wholesalers

(Million 1997$) Hardware, Plumbing and Heating Equipment and Supplies Merchant

Wholesalers (Million 1997$) Sales (revenue) Cost of Goods Sold (CGS) Gross Margin (GM) 205688

160435

45253 74080

54835

19245 Labor Scaling Costs Payroll 19402 9154 Fringe Benefits 3233 1543

Contract Labor 954

- Taxes and License Fees 450 203 Lease and Rental Payments 1980 985 Telephone and Communications 958 350

Utilities 478 219 Repair and Maintenance 436 226

Commissions 1309 190 Total Labor Scaling Costs 71310 29351 Non-Labor Scaling Costs Computer and Office Supplies 663 261 Packaging 425 121 Advertising Services 1842 371 Legal Services 292 88 Accounting, Auditing, and Bookkeeping 215 106

Computer Services 498 127 Depreciation and Amortization Charges 1947 517

Other Operating Expenses 6759 1835

Net Profit Before Taxes 3143 2764 Total Non-Labor Scaling Costs 12641 3426 Baseline Markup Incremental Markup 1.28

1.10 1.35

1.11



### 6-A.4 DETAILED BUILDER DATA

Table 6-A.4.1 shows the complete breakdown of costs and expenses for builders, as provided in the 2002 Economic Census Geographic Area Series for Construction. 2 

### Eight states were omitted due to incomplete data reporting.

6-A-3

### Table 6-A.4.1 Disaggregated Costs and Expenses for Builders (2002$)

State # of Firms Value of Construction Cost of Materials Subcontracted Baseline

Construction Payroll Work Cost Markup

Thousand Dollars Thousand Dollars Thousand Dollars Thousand Dollars

AL 625 621596 34491 219447 238657 1.26

AZ 1022 1624290 94033 355310 863488 1.24

CA 5524 6687563 660997 1516936 2637976 1.39

CO 1683 1694526 127205 574850 663001 1.24

DE 282 321797 19884 80878 112716 1.51

FL 3342 6715061 255354 1923959 2705273 1.37

GA 1402 1665422 80051 608070 619846 1.27

HI 264 707731 69177 183672 294540 1.29

IL 2306 1952884 170913 546704 719301 1.36

IN 1283 1302913 155256 559830 428344 1.14

IA 739 370207 34795 146490 105194 1.29

KS 603 468596 37696 150681 168272 1.31

KY 586 547314 56437 186311 165726 1.34

LA 456 367627 27770 142457 119715 1.27

ME 588 433835 41420 139087 149814 1.31

MA 963 1350052 104444 396834 502107 1.35

MI 2580 2008409 184591 737948 672114 1.26

MN 1409 1384067 97220 411900 478584 1.40

MT 571 490475 45767 168316 186907 1.22

NE 427 272811 20008 91958 105480 1.25

NH 337 356830 25981 115120 131246 1.31

NJ 1530 2242274 189670 600881 837618 1.38

NM 591 440864 41657 126967 155652 1.36

NY 2812 2265480 165474 703889 871477 1.30

NC 2488 2386858 160435 831415 838182 1.30

ND 115 70417 9223 27293 15817 1.35

OH 2176 2123600 124602 695612 717457 1.38

OK 570 438084 33609 158829 136306 1.33

OR 1112 706038 47012 237685 247540 1.33

PA 2316 2701233 175321 886125 1009063 1.30

RI 260 219953 18137 103547 83347 1.07

SC 994 1020532 69041 395786 380231 1.21

SD 278 185576 13150 83969 57714 1.20

TN 823 686823 69934 234449 209053 1.34

TX 2412 3359463 182477 1125797 1422079 1.23

UT 735 654146 48009 207171 260917 1.27

VT 348 317156 28690 84640 82994 1.62

VA 1774 2030808 157808 596727 658787 1.44

WA 2180 1518492 111803 443597 589553 1.33

WV 527 239153 25920 79762 66543 1.39

WI 1916 2003070 150226 745314 742608 1.22

WY 278 238912 31477 71910 86807 1.26 Avg 1267 1361737 99933 421384 512811 1.31



### 6-A.5 MARKUP VALIDATION DATA

Table 6-A.5.1 provides an example of baseline markup validation for 40 gallon gas-fired storage, 50 gallon electric storage, 30 gallon oil-fired storage, and gas-fired instantaneous water heaters. The markup is calculated as for distribution channel “Replacement A,” described in chapter 6, Markups to Determine Product Cost.

6-A-4

### Table 6-A.5.1 Water Heater Markup Validation (Prices in 2007$)

Water Heater Type Energy Efficiency (EF) Mfr.

Production

Cost Mfr. Selling

Price Implied

Mfr. Markup Average

Retail

Price Implied

Retail Markup Sales

Tax Total Markup

Gas (40 gallon) 0.59 $160 $221 1.38 $361 1.63 7.24% 2.42
Electric (50 gallon) 0.90 $122 $168 1.38 $238 1.42 7.24% 2.10
Oil (30 gallon) 0.54 $518 $715 1.38 $1028 1.44 7.24% 2.13

Gas Instantaneous 0.69 $235 $341 1.38 $560 1.64 7.24% 2.43

6-A-5

### REFERENCES

1. U.S. Department of Commerce - Bureau of the Census, 1997 Economic Census: Business Expenses , 2000. Washington, DC.

2. U. S. Department of Commerce - Bureau of the Census, 2002 Economic Census Geographic Area Series Construction. , 2005. Washington, DC.

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