Overhead costs are the indirect expenses that are necessary to run a business, such as rent, utilities, insurance, and administrative salaries. They are not directly related to the production or delivery of goods or services, but they affect the profitability and efficiency of a business. In this article, you will learn how to calculate overhead costs and why they are important for financial management.
Overhead costs can be divided into two main categories: fixed and variable. Fixed overhead costs are the ones that do not change with the level of output or sales, such as rent, depreciation, property taxes, and interest. Variable overhead costs are the ones that vary with the level of output or sales, such as electricity, supplies, maintenance, and commissions. Some overhead costs can be mixed, meaning that they have both fixed and variable components, such as phone bills, internet, and advertising.
In the NGO context, "overhead costs" might be referred to as "administrative expenses" or "operational expenditures." These terms are often used to describe the costs associated with running the organization itself rather than directly funding programs or projects.
Os custos indiretos ser?o aqueles distribuídos por diversos departamentos e como ser?o alocados aos produtos como por exemplo horas máquinas de trabalho e seu valor por, assim você terá hora x pre?o. Também pode ser o valor de horas homem trabalhado x o valor da m?o de obra. Pois certas empresas possuem varia??es sazonais em sua produ??o de volume, nesse caso n?o é viável despejar todo o custo de uma vez, assim nasce a taxa de aplica??o de custo indireto de produ??o ou de servi?o.
Overhead costs can be allocated to different products, services, departments, or activities based on some common measure or driver. For example, you can allocate overhead costs based on direct labor hours, machine hours, direct material costs, sales revenue, or units produced. The choice of the allocation base depends on the nature of the business and the cost behavior. The goal is to assign overhead costs in a fair and accurate way that reflects the actual consumption of resources.
The overhead rate is the ratio of overhead costs to the allocation base, representing how much overhead cost is incurred per unit of the allocation base. To calculate the overhead rate, you need to identify the relevant period for the calculation, such as a month, a quarter, or a year. Then add up all the overhead costs and units of the allocation base for that period. Finally, divide the total overhead costs by the total units of the allocation base. As an example, if your total overhead costs for a month are $10,000 and your total direct labor hours are 2,000, your overhead rate would be $10,000 / 2,000 = $5 per direct labor hour.
The overhead rate can be used to assign overhead costs to different products, services, departments, or activities. To apply the overhead rate, you need to multiply it by the actual units of the allocation base used by each cost object. For example, if your overhead rate is $5 per direct labor hour and your product A requires 100 direct labor hours, your overhead cost for product A is $5 x 100 = $500.
Calculating overhead costs is an essential skill for financial management as it can help you to monitor and control expenses, determine the break-even point and margin of safety, price products competitively and profitably, analyze the profitability and performance of different cost objects, and budget and forecast future costs and revenues. This can enable you to make informed decisions and optimize your business operations.