Shared setup can reduce average variable cost, but a discount is only sustainable if the combined margin remains adequate.
Try this with your own numbersFormula and worked example
Bundle price = (items × variable cost + setup cost) / (1 − margin)
| Input | Example |
|---|---|
| Items or visits in bundle | 4 |
| Variable cost per item | 50 |
| One-time setup cost | 30 |
| Target contribution margin | 35 % |
| Calculated result | 353.8462 |
Choose reliable inputs
Separate parts, technician time and bay availability for each repair order. For this auto repair calculation, use repair orders, parts invoices and technician time logs and a consistent definition of one repair order.
- Parts: include the portion belonging to this repair order or reporting period, and record where the value came from.
- Technician time: include the portion belonging to this repair order or reporting period, and record where the value came from.
- Shop overhead: include the portion belonging to this repair order or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Can a bundle reduce the cost per item?
Shared setup can reduce average variable cost, but a discount is only sustainable if the combined margin remains adequate.
This is a contribution-margin price; fixed business overhead is not automatically included.
What if this input changes?
If items or visits in bundle rises by 10%, this example changes by 30.7692 . This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.