APPENDIX 6-A. DETAILED DATA FOR PRODUCT COST MARKUPS
 

TABLE OF CONTENTS
 

6-A.1 MARKUPS VALIDATION ..................................................................................6-A-1
 

LIST OF TABLES 

Table 6-A.1.1 Clothes Dryer Markup Validation (Prices in 2008$).................................6-A-2
 

Table 6-A.1.2 Room Air Conditioner Markup Validation (Prices in 2008$) ...................6-A-2
 

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APPENDIX 6-A. DETAILED DATA FOR PRODUCT COST MARKUPS 

6-A.1 MARKUPS VALIDATION 

This appendix provides further details on the markups validation presented in chapter 6, 

Markups to Determine Product Cost. As part of its market data collection, DOE assembled a data 

base with retail Internet prices for a large number of clothes dryer models at baseline efficiency. 

Additionally, DOE used detailed sales data from NPD Group, a market research firm, to estimate 

room air conditioner retail prices at baseline efficiency for three of the product classes.a 

For each model, DOE divided the retail price by the estimated manufacturer cost for the 

appropriately-sized clothes dryer or room air conditioner (estimated as described in chapter 5) to 

derive an implicit markup. This markup would include the manufacturer markup and the retail 

markup. To be comparable with the overall markups shown in Table 6.6.1, DOE added U.S.­

average sales tax values for each product. Table 6-A.1.1 and Table 6-A.1.2 provide details of the 

baseline markup validation for select clothes dryer and room air conditioner product classes, as 

defined in the Framework Document.1 Room air conditioner product classes are defined by 

louvered or non-louvered sides, and by Btu per hour cooling capacity. Clothes dryer product 

classes are defined by drum capacity. Because the manufacturer production costs differ by 

product class, a separate markup is estimated for each product class. 

In chapter 6, Markups to Determine Product Cost, DOE estimates an overall baseline 

markup of 1.95 for both room air conditioners and clothes dryers. As illustrated by Table 6-A.1.1 

and Table 6-A.1.2, DOE’s markup validation of detailed sales data arrives at similar markup 

estimates for most product class, ranging between 1.71 and 2.40. 

Some product classes were omitted due to an inconsistency between the efficiency levels 

used to estimate manufacturer cost and the levels found in the retail price data. The Internet retail 

data for natural gas clothes dryers included only models significantly more efficient than the 

baseline efficiency of 2.67 lbs/kWh defined for this product class, and would thus not be 

appropriate for the estimation of a baseline markup. The NPD data set for room air conditioners 

reports efficiency in increments of 0.5 EER. Manufacturer production costs for less than 20,000 

Btu/h units with louvered sides are reported for units with base efficiencies of 9.7 and 9.8 EER. 

These categories could not be satisfactorily matched to NPD retail price data. 

a For the other product classes, there was an imperfect match between efficiency levels of retail data and those used 

to estimate manufacturing cost. 

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Table 6-A.1.1 Clothes Dryer Markup Validation (Prices in 2008$)
 

Clothes Dryer 

Type 

Units in 

Price 

Data Set 

Energy 

Efficiency 

(lbs/kWh) 

Mfr. 

Production 

Costb 

Average 

Retail 

Price 

Implied 

Retail 

Markup 

Sales 

Tax 

Total 

Markup 

Electric, 4.4 or 

more cu. ft. 119 3.01 $438 $987 2.25 6.53% 2.40 

Electric, less than 

4.4 cu. ft. 70 3.13 $379 $608 1.61 6.53% 1.71 

Table 6-A.1.2 Room Air Conditioner Markup Validation (Prices in 2008$)
 

Air Conditioner 

Type 

Units in 

Price 

Data Set 

Energy 

Efficiency 

(EER) 

Mfr. 

Production 

Cost 

Average 

Retail 

Price 

Implied 

Retail 

Markup 

Sales 

Tax 

Total 

Markup 

Louvered sides, 

20,000 Btu/h or more 186 8.5 $346 $577 1.43 6.83% 1.78 

No louvered sides, 

8,000–9,999 Btu/h 86 8.5 $217 $362 1.67 6.83% 1.79 

No louvered sides, 

10,000–14,999 Btu/h 67 8.5 $238 $471 1.67 6.83% 2.11 

b Manufacturer cost is an average of vent-less and vented, so as to be representative of the models in the Internet 

retail data for clothes dryers. 

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REFERENCES
 

U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy Building 

Technologies Program. Energy Conservation Standards Rulemaking Framework Document 

for Residential Clothes Dryers and Room Air Conditioners. October 24, 2007. pp. 13-15. 

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