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Finance

Do The Math - Digging a Hole By Discounting Your Services

Source: Sal Alfano, executive editor at Professional Remodeler

Fixed Cost in $$
Break-Even = ________________
1-Variable Costs %

or

FC $
BE = ______
1-VC%

Remember: 1-Variable Cost% = 1-VC% = Margin% (or Contribution Margin%)

Extra Sales Needed to Make Up the Discount Offered

=

Discount Offered
_______________
1-Variable Cost %

=

In the Example:

5,000
_____ = 16,667
.30

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