Fixed Costs / Overhead Expenses
Example of what your fixed costs consists of.
Profit and Loss Statement for a commercial company usually follow this
Sale / Turnover
- Variable Costs / Used Goods
= Gross Profit
- Fixed Costs
Each of the items in the Profit and Loss statement should be examined at
regular intervals. You can always minimise costs or optimise performance.
Fixed Cost / Overhead expense
The questions you could ask when looking at the Fixed Costs / Overhead expenses
- Can we reduce any of the Overhead Expenses without affecting the
production income negatively?
Do we need to buy stationary for 1.950 $ and what is it that we bought?
through all entries in the Salary account.
- What do each staff member in the administration get in salary? Is it too
high – or too low?
- Can we reduce some of the bank fees? - And what kind of expenses are
included in bank fees?
- Why is the cash deviation so big?
- Can we find less expensive consultants which are just as good?
- Do we have to spend so much on transport?
- Does mileage on the cars relate to expenses on gasoline?
- Why are transport costs not put on variable costs under the different
sections so it would reflect the sections´ use of the car?
- Which buildings have we maintained this year?
- Who did the maintenance work and on what price? Did we get an offer from
- Have we chosen the best way of depreciation and do we have obsolete
- Are there banks who give a lower interest rate?
Some of the answers to these questions might give you some ideas for
adjusting the Overhead Expenses.
If you don´t drive your business, you will be driven out of business.
- B. C. Forbes, founded Forbes Magazine