Definitions and calculator
The numbers
Separate the kinds of price before you subtract anything. The calculator uses only the figures you type.
Price words that are not interchangeable
| Term | What it is |
|---|---|
| MSRP | A manufacturer list price. Not proof of what buyers paid. |
| Advertised reference price | A price a promotion compares itself with. Ask when it applied and whether the product was offered at that price. |
| Actual transaction price | What a buyer paid in a real sale. A single quote does not establish this for a market. |
| Allowance | A credit the offer says it will apply. Read where it can be applied. |
| Installed cost | Equipment, labor, materials, modifications, and fees, minus only the credits the contract applies. |
Evidence label: definitions used by this site. Not a price survey.
What does “free” actually mean?
Enter actual written figures. Leave unknown fields blank.
- Net equipment after allowance = max(0, equipment price − allowance).
- If the allowance is larger than the equipment price, the extra credit is shown on its own line and is not subtracted from labor.
- Installation and additional = labor + materials/modifications + other required charges. If any of those three is blank, the sum stays unknown.
- Incremental installed furnace cost = net equipment after allowance + installation and additional.
- Labor-to-equipment ratio = labor ÷ equipment-only price, only when the equipment price is greater than zero.
- Package versus alternative = package total − AC-only comparison price. It is never built by adding the other lines.
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