Gross Profit Margin Product of a Company: Carpet Cleaning Services Assignment

Assignment Task

Example Product of a company : Carpet cleaning services 

Direct cost in this instance is the man  or men that do the physical work, chemicals and wear of surface pad of machine.

Average

Average unit price of your business product sold (retail): $ 190.71

Average price (per unit) of your business product to make/direct costings: $ 8

Gross Profit Margin: $ 110.00 - 57.68%

Weekly: Can sell or provide 12 jobs per week

Sales: $ 190.71 X 12 = $2,288.52

Direct costs: $80.71 X 12 = 968.52

Yearly: 52 weeks, but say 50 weeks on average.

Sales: $ 2,288.52 X 50 = $114,426.00

Direct costs: $968.52 x 50 = $ 48,426.00

Monthly: calculate if you wish

Result of yearly sales less direct costs = $66,000.00

Gross Profit Margin (year): 57.68%

Less fixed costs, and tax: to give you 'Net Profit'

Break Even Calculator (yearly)

Percentage of price that is Net profit - Net Profit Margin (all expenses against sales, including tax paid to goverment

Percentage of price that is gross profit - Gross Profit Margin (profitability of an average single item against direct costs / production costs / cost to make, of a single item (the unit)

Totals sales needed to break-even (see method in red)

number of units needed to be sold to break-even (yearly)

Notes

Direct costs' are 'variable costs', depending on amount of product produced. Fixed Costs' are 'indirect costs' that remain constant like lease payments, rent, insurances, legal, accountancy, light power, travel, postage, wages, etc.

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