Service economics
Know what each procedure costs before you price it
Service economics in Modirify brings expenses, purchase obligations, lab balances, dentist commissions, service materials and pricing into one operational view. The central method starts with clinic cost per operating hour, then gives each procedure its time share of that fixed cost and adds materials and commission. The result is a reviewable service cost, profit and margin rather than a sales total alone.
Direct answer
How is the cost of a dental service calculated?
First divide total fixed monthly cost by actual working hours per month to get cost per operating hour. Then calculate the procedure’s fixed-cost share from its chair minutes and add material cost and dentist commission. Price minus total cost is profit, and profit divided by price is margin. The embedded calculator applies this same method.
01Service economics
The cost view uses recorded operational components instead of a detached estimate.
Core capabilities
Verified finance and pricing controls
The cost view uses recorded operational components instead of a detached estimate.
Purchase invoices, payables and related payments.
Dental lab obligations and settlement tracking.
Doctor commissions calculated from recorded rules.
Service pricing with material components for each service.
Service cost and margin based on recorded components.
The service-cost method
Build the result from fixed cost, time, materials and commission
This is the same method explained in the existing service-cost and margin guide.
Separate fixed and variable cost
Variable cost is tied to the case: materials, consumables and anything not spent if the patient does not attend. Fixed cost is paid regardless of case volume: rent, salaries, utilities, subscriptions and equipment depreciation. Counting only materials misses the share of every fixed amount consumed while a procedure occupies the chair.
Work out cost per operating hour once
Add fixed salaries without dentist commissions, rent, utilities and subscriptions, then monthly equipment depreciation. Divide that total by actual monthly working hours: hours per day multiplied by days per week and weeks per month. The result is what one operating hour costs the clinic.
Do not ignore equipment depreciation
Depreciation is a real cost that does not leave the till each month, which is why it is forgotten. Equipment and fit-out worth half a million with a 5-year accounting life represent about 8,300 a month. Leaving it out means the apparent profit never funds eventual replacement.
Give the procedure its time share
Divide procedure minutes by 60 and multiply by cost per hour. A 45-minute procedure in a clinic costing 330 per hour carries about 248 of fixed cost before materials. This step exposes long, low-priced procedures whose chair time is not covered.
Apply commission by its recorded mode
A percentage commission is calculated on procedure price, so raising the price also raises the dentist share. Some agreements use a fixed amount per case instead. The calculator supports both modes because the arithmetic changes when price changes.
Read margin as a decision
Total cost is materials plus the time share of fixed cost plus commission. Price minus cost is profit; profit divided by price is margin. A low margin can lead to reviewing price, duration, materials or commission rather than assuming one response fits every service.
Embedded calculator
Enter your clinic numbers
Cost per hour = total fixed monthly / working hours per month · Total cost = materials + (minutes / 60 × cost per hour) + commission
The result is an operating margin before tax and other obligations. Review tax treatment with your accountant. JavaScript enhances the visible method and default inputs with live results.
Workflow
From clinic cost to a pricing decision
Keep each input visible so the result can be reviewed.
Record fixed costs
Classify salaries, running costs, other fixed items and equipment value.
Define working capacity
Use actual hours per day, days per week and weeks per month.
Describe the service
Enter price, duration, material cost and the recorded commission method.
Review the decision
Compare total cost, profit and margin, then review price, time, materials or commission.
Daily value
Why service economics matters
A cost before a price decision
The clinic sees fixed, variable and commission components together.
Comparable services
Each procedure uses the same method while retaining its own duration and materials.
A reviewable margin
The result identifies which input should be examined instead of treating sales as profit.
Clear answers
Frequently asked questions
What is the difference between fixed and variable cost?
Variable cost belongs to the case; fixed cost is paid regardless of volume and is spread across actual working hours.
Where does cost per hour come from?
It is total fixed monthly cost divided by hours per day multiplied by days per week and weeks per month.
Does this include dentist commission?
Yes. The calculation supports a percentage of price or a fixed amount, according to the recorded agreement.
Does the result include tax?
No. It is an operating margin before tax and other obligations; review local treatment with your accountant.
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