The amount before profit and overhead

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Question from kelly:

I have an existing amount of $22,750.00. this includes the profit at 10% and overhead at 10%.
How do I remove the profit and overhead in order to come up with the original starting figure?

Hi Kelly,

I would start by assuming you know the original starting figure and that you can use some algebra.

Suppose the original starting price is $\$S.$. You add 10% for profit and 10% for overhead so you are adding 20%. Thus

\[\$S + 0.20 \times \$S = \$22,750.\]

Thus

\[1.20 \times \$S = \$22,750.\]

Now the algebraic step. Divide both sides by 1.20 to get

\[\$S = \frac{\$22,750}{1.20} = \$18,958.34\]

Penny

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