PDA

View Full Version : quick OH primer

emahler
12-04-2008, 08:14 AM
quick question, if a 1 man shop has $1000 a month in fixed overhead expense, and a 10 man (all field workers) has a $9500 a month fixed overhead....

who has more overhead?
Dr.Sparks
12-04-2008, 08:21 AM
quick question, if a 1 man shop has $1000 a month in fixed overhead expense, and a 10 man (all field workers) has a $9500 a month fixed overhead....

who has more overhead?

Is there anyone on a train traveling 60 mph downhill into the sun on a Friday during a Summer snow storm??
emahler
12-04-2008, 08:24 AM
Is there anyone on a train traveling 60 mph downhill into the sun on a Friday during a Summer snow storm??

hence the point of the question...guys don't differentiate gross overhead from OH/man hour...thanks for the insight doc...you are a smart man...
macmikeman
12-04-2008, 10:56 AM
This is a really hard question you are asking Mr. Mahler. It makes my head hurt to think that hard. So, instead of answering, I think I will have to shut down my operations for the day and head out to Waimea Bay to watch the Eddie Aikau big wave contest. 8-) Zen
GUNNING
12-04-2008, 01:17 PM
Depends on benefit package, if you own it or work there, and if the phone is ringing. You can go a long way on someone else's credit.
emahler
12-04-2008, 01:30 PM
Depends on benefit package, if you own it or work there, and if the phone is ringing. You can go a long way on someone else's credit.

what does that have to do with OH? you and sparky should hang out...
frank_n
12-04-2008, 01:50 PM
quick question, if a 1 man shop has $1000 a month in fixed overhead expense, and a 10 man (all field workers) has a $9500 a month fixed overhead....

who has more overhead?

The 10-man shop has more overhead. The 1-man shop has more overhead/hr. The 1-man shop needs to charge more per man hour to cover his fixed expenses.

----------------------------------------------------------------------------------

If there are 172 working hours in a month. (4.3 wks x 40 hrs/wk)

The 1-man shop needs to charge ($1000/172) = $5.81/hr to cover his fixed expenses.

The 10-man shop needs to charge ($9500/(172 x 10)) = $5.52/hr to cover the fixed expense.

Frank