can you give me 4 reasons for monitoring overheads?(expenses)?

Answer 1

These are often fixed costs and do not vary with production levels, so must be kept under control.
There are often alternative ways of paying for them, some of which are cheaper than others.
There are different ways of meeting the needs....eg it may be more cost effective to lease a machine rather than buy it, but this will add to fixed costs.
All costs should be reviewed regularly to ensure money is being spent effectively rather than just because 'that's the way we've always done it'.

Answer 2

# 1 - To keep track of Expenditure (What you're spending)

# 2 - To keep an eye on the Profit/Loss Ratio (Making or losing money)

# 3 - To keep Stock Levels in proportion to Sales (not to have excess goods which don't sell)

# 4 - To show that you are in Control of the other aspects of the business

Answer 3

Yes... Because you made $100,000 gross revenue this year, your labor is 80,000 and materials 25,000... you didnt make anything... You need to figure out what your overhead is on a yearly basis (include insurance and rent) and then factor in what % you want to make profit.. it makes it easier to know what to charge people