Arkansas HVACR NewsMagazine April 2018

S tate, National, Chapter News Feature Story

Example of Daily Tracking: Department overhead for the month: $5,000 Sales: (assume entire job completed within period) • Bob the Builder – $7,000 job @ 33% gross margin = $2,310 • Smith Construction – $6,000 job @ 25% gross margin = $1,500 • Grandy Construction – $3,000 job @ 38% gross margin = $1,140 • Total gross profit dollars earned for period = $4,950 • Condition of department at end of month for the period = $50 • The department is short by $50. To show a profit, you must earn enough gross profit dollars to exceed overhead dollars. In other words, the gross margin percentage must be greater than the overhead percentage.

How to Track Your Progress Daily 1. Forecast the department overhead dollars that will be spent for the entire month. 2. Record the gross margin dollars you expect to earn on each sale.