Calculate a minimum service-call price using contribution margin.
You are deciding whether an $89 diagnostic visit can be profitable for a plumbing service team. Contribution margin = service revenue - variable costs tied to that call. The common trap is comparing your price to a competitor's ad without checking whether the call covers the direct cost of putting a trained technician in a truck. Step 1 Start with revenue: $89 diagnostic fee. Use the actual customer-paid amount, not the advertised headline if discounts or credits apply. Step 2 Subtract technician variable labor: 1.2 hours x $34 loaded hourly cost = $40.80. Loaded hourly cost should include payroll taxes…
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