Assumptions Report No. 3 - Overhead Expenses

Guidance on Entering Assumptions > Assumptions Report No. 3 - Overhead Expenses

Use this assumptions report for fixed costs and overhead expenses. As far as practicable, enter direct and variable (or even semi-variable) costs into Assumptions Report No. 2 as this will facilitate more accurate assessments of break-even and sensitivity analysis and more correctly determine the Cost of Goods Sold.

If desired, construct a schedule below the report to set out detailed calculations - see Making Simple Changes and especially Plugging New Variables into an Existing Variable.

Selling expenses ($000):
This expense group includes a variable selling expense expressed as a percentage of sales. Use the unprotected variables to handle fixed selling and freight expenses. If it is appropriate to include freight expenses in direct costs, enter appropriate values in Other direct costs in Assumptions Report No. 2.

Clerical staff (Persons)
Management staff (Persons)
Enter projected annual average head counts. If it is not feasible to project staff numbers, use "1" as the total staff number. Then, enter a combined total payroll cost for all staff instead of an average individual payroll cost (this works on the basis that 10 staff at $20,000 per year equates to 1 staff at $200,000 per year). If this approach is used, the calculation of total employment numbers in the Ratio Analysis Report will not be correct.

Clerical payroll/benefits ($000/pers/year)
Management payroll/benefits ($000/pers/year)
Use average annual payroll costs. This should include all related expenses, perks, pensions as well as related social insurance/security items which are usually payable in arrears to the State (or other comparable organizations).

General expenses ($000):
The expense descriptions within these groups can be changed.

See Also:

Assumptions Report No. 1 - Sales Forecasts

Assumptions Report No. 2 - Materials/Goods, Other Direct Costs & Purchases

Assumptions Report No. 4 - Fixed Assets

Assumptions Report No. 5 - Funding, Interest Rates & Related Items

Assumptions Report No. 6 - Sales & Related Taxes

Assumptions Report No. 7 - Year-End Credit Balances

Opening Balance Sheet

Prior-Year Income Statement

Detailed Guidance on Generating Projections

Guidance on Entering Assumptions

Changing Exl-Plan