Reply by derosa

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Posted on Pricing Your Work

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1577 posts in 2862 days

#1 posted 04-29-2012 05:59 AM

I’m trying to figure out Lee’s pricing and all I can think is that it will way overprice something
Material cost + extras cost x 125% plus (hours times your shop fixed costs/hour) plus your labor rate x hours = $123.45. times your profit percentage, say 114%, = selling price.
I’m trying to figure out how the 125% that multiplied to the materials and extra costs isn’t the profit. Seems like multiplying the whole formula by the 114% just results in multiplying profit x profit and that makes no sense to me.

Basics at the bicycle shop are
parts plus materials X 2 + labor rate x estimated hours. The labor rate takes into account the pay, income tax/ssi, utilities and costs to keep the shop open per hour. Roughly 70.00 an hour. So there is no profit on labor, more of a breaking even with all profits made on materials/parts. When dealing with very low cost items they may be marked up several times to increase the overall profitability.

-- --Rev. Russ in NY-- A posse ad esse

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