What is overhead ❓

👉 What are overheads?

Overhead is the cost that comes from production. If there are overheads that are high, it can be a detriment to the business. Therefore, operators must be careful of overhead costs and have to reduce overhead costs to a minimum. Often, fixed overhead costs are converted to variable costs.

👉 What are the overheads?

As said, overhead is the cost that comes from production. Therefore, the cost incurred during production is counted as overhead. For example, the cost of transportation. Office equipment costs, fines, order fees, customer service fees, and business expenses, etc.

👉🏻What are the costs that are not overhead?

Up to the overhead will mean the cost. But not all expenses are overhead. which the non-overhead cost is Costs, for example, salary, production costs, etc.

👉🏻How to calculate overhead?

Overheads must be estimated from old data. Based on the total expenses in 1 month, how many baht are there? then divide the output It will be the expenses that will be taken into account the cost of production. for example Monthly expenses of Company A are fuel costs 3,000 baht, parts costs 5,000 baht. When calculating the overhead cost per 5 cars, it's 1,600 baht per car.

Calculating overhead costs will not only reduce the cost burden that an entity has to bear. but also help future business planning as well Therefore, overhead calculations are important and should not be miscalculated. Because if it is wrong, it can cause discrepancies in business planning.

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