Quote:
Originally Posted by iggy_oi
No but at the current wage an employee has to pour 8 drinks/hour to cover his wage, if he pours 2-5 more he has likely covered the utility charges for that hour as well. At $15/hour he has to pour about 11 cups per hour to cover his wage.
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But that just covers his wage, what about overhead, or the guy that reloads the machine or the person that sweeps the floors and cleans the tables, and the managers salary, and the utilities build and IT costs? Or the guy that comes in at night to clean and do maintenance. Those all come out of the sale of the pop as well.
Suddenly are we talking about selling 20 pops in an hour to cover that or 25?
And if we increase the pay by three bucks an hour lets say, suddenly that whole formula goes up.
Again there's a difference between markup on an item that you sell as a suite of items, and the overall profitability of the item if you do your accounting that way.
Another example is I deal with a lot of engineering firms that do time and expenses projects. But the profitability of the project just isn't billable hourly rate - salaries of those on the project + expenses. Every one of them has to attach an over head charge to those projects.