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For sake of this example, let’s look limited to the Fixed Costs. So let’s look at Cisco and how it relates to Fixed Costs. Let’s lessen price through the variable costs and use the difference or net margin as our price. Now our price is the money intended to repay fixed costs and to provide a profit. Let’s assume that the net price is $2.00, our Fixed Costs are $1.5 million, and our sales volume is millions of units. During this point, the unit cost is $1.50. Therefore our profit is rr.50. Great, we’re making money.
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There exist several Variable Costs having indoor growing. Nutrient companies will try inform you possible NOT achieve great results unless you utilize their expensive products. Nutrients don’t should be that expensive but they do add down. Electricity for HID lamps is exceedingly pricey specifically if you live in metro areas like San Francisco, New york and Honolulu. If your water supply has a TDS count over 300, is “hard” or possess heavy metals and chlorine you should take time to use a water filter system like Reverse Osmosis, UV, or activated water. These systems are not cheap but consist of a necessary evil if somebody blessed with pure rainwater. Being comfortable with the Variable Costs will help you keep your attention on the prize.
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