Quote:
Originally Posted by ITD
You forgot overhead costs and labor costs, people don't work for free, electricity, water, maintenance, insurance, so on and so on, if you base your prices soley on raw materials cost you will be bankrupt very quickly.....
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Direct margin is the price - cost of goods sold. Profit is defined by direct margin - indirect costs (staffing, rent etc...). What you are describing comes out of the direct margin. I described this correctly.