In this example, increasing instructor cost cost from 200 to 220 changes the result from 714.2857 to 742.8571 . All other inputs stay the same.
Try this with your own numbersFormula and worked example
Quote = (itemised delivery costs + allocated overhead) ÷ (1 − margin − commission)
| Input | Example |
|---|---|
| Instructor cost cost | 200 |
| Room cost cost | 150 |
| Attendance cost | 50 |
| Fixed overhead allocated to this class place | 100 |
| Target margin after commission | 25 % |
| Selling-price commission | 5 % |
| Calculated result | 714.2857 |
Delivery cost 400; allocated overhead 100; commission 35.7143; retained contribution after assigned costs 178.5714.
Choose reliable inputs
Connect teaching time, preparation, attendance and room capacity to each lesson or class. For this yoga studio calculation, use attendance records, teaching schedules and room costs and a consistent definition of one class place.
- Instructor cost: include the portion belonging to this class place or reporting period, and record where the value came from.
- Room cost: include the portion belonging to this class place or reporting period, and record where the value came from.
- Attendance: include the portion belonging to this class place 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.
How should commission change my quote?
Adding a commission percentage to cost does not preserve the target margin. Commission is based on the selling price.
Allocate overhead once; target margin and commission together must be below 100%.
What if this input changes?
If instructor cost cost rises by 10%, this example changes by 28.5714 . 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.