Closed myamakerspace closed 8 years ago
Ways to calculate overhead/indirect costs:
Step 1 Add up all expenses that are not directly allocated to the manufacture of an individual product or performance of a service. This includes office-related costs such as administrative staff payroll, rent and copier leases. Financing costs, such as loan fees, points and interest, are also considered indirect costs.
Step 2 Total the company's direct costs for all of its products and services. Direct costs generally include hourly labor, materials and commissions that can be linked to the sale of one particular product or service.
Related Reading: How do I Calculate Overhead Costs?
Step 3 Divide the indirect costs from Step One by the direct costs from Step Two. Multiply the result by 100 to convert it to a percentage. This is the company's operating overhead rate. For example, if the company's indirect costs are $25,000 and its direct costs are $50,000, it has an overhead rate of 50 percent.
http://smallbusiness.chron.com/calculate-operating-overhead-rate-59854.html
Better way: Activity Based Costing https://www.youtube.com/watch?v=POeN1BVM8PE https://www.youtube.com/watch?v=pL4dKcRLdLc
Aaron is reviewing costs
The correct price is $450 per half-day session. We need to do 150 sessions to make that price work. 150 sessions is extrapolated from the number of sessions we did in a 4 month period last year. As a side effect, I now have revenue targets consistent with a more sustainable operating budget than we are currently working off of.
2-hour kid/co-teaching session is $300