This document compares the costs and sales projections for equipment with minimum, mid, and high efficiency for a heating, ventilation, and air conditioning (HVAC) company. It shows that higher efficiency equipment has higher upfront costs but requires selling fewer jobs to reach the desired annual sales goal of $1 million. With mid-efficiency equipment, 94 jobs would need to be sold, while high-efficiency equipment would require selling 78 jobs to hit the annual sales target. The document also notes that the national average overhead for an HVAC company is between 28-32% according to the Department of Labor.

1. Equipment Min. Efficiency Mid Efficiency High Efficiency
FURNACE $1,207.00 $1,407.00 $1,607.00
COIL $324.15 $324.15 $324.15
CONSUMABLES $350.00 $350.00 $350.00
CONDENSER $914.00 $2,289.57 $3,375.98
LABOR BREAKEVEN $2,000.00 $2,000.00 $2,000.00
TOTAL COGS $4,795.15 $6,370.72 $7,657.13 Desired Annual Sales
MARGIN DIVIDER 0.6 0.6 0.6 $1,000,000.00
SALE $7,991.92 $10,617.87 $12,761.88
SALE = INVOICE TOTAL
JOBS TO BE SOLD 125 94 78 COGS = COST OF GOODS SOLD
TOTAL SALES $1,000,000.00 $1,000,000.00 $1,000,000.00 GP = GROSS PROFIT
OH = OVERHEAD
NET = NET PROFIT BEFORE TAXES
SALE $7,991.92 $10,617.87 $12,761.88
COGS $4,795.15 $6,370.72 $7,657.13 EXAMPLE:
GP $3,196.77 $4,247.15 $5,104.75 (COGS ) DIVIDED BY .60 (40% MARGIN) = SALE
OH $2,397.58 $3,185.36 $3,828.57 SALE MINUS (COGS) = GP
NET $799.19 $1,061.79 $1,276.19 SALE MULTIPLIED BY (30% NATIONAL AVERAGE) OH
JOBS SOLD 125 94 78 GP MINUS OH = NET PROFIT
ANNUAL NET $100,000.00 $100,000.00 $100,000.00
Mid Efficiency High Efficiency
The national average overhead for an HVAC Company according to the -25% -37%
Dept. of Labor is 28 to 32 percent. A 30% Overhead and 10% Net less to sell less to sell
Profit were used for the examples in this sheet.
Margin Divider Detemined By
100 - (OH + NP) = %
Prepared By timothy.conrad1969@gmail.com