Calculation fixed overhead costs

Question

I have a question about the calculation of the allocated fixed overhead costs. When calculating the margin of 8% only fixed costs (Personnel and Store rent) are taken into consideration and variable costs e.g. purchase prices are ignored. Therefore, the 8% only represents the profit margin after fixed costs if I am not mistaken. When calculating the fixed overhead costs, however, the 8% margin is applied as if it represents the profit margin after all costs (including purchase prices). For me, this seems inconsistent and I don´t really understand why this is possible.

Answer 1

Hi there!

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Answer 2

Hi there,

Really hard to assist without more information.

Can you please point to the exact part of the case where this calculation occurs (and provide screenshots).

Help us help you!

Answer 3

Thank you for your question. We have reviewed and adjusted the case. We hope it is more clear now, and let us know if you have further feedback. Your PrepLounge team

Answer 4

Hello,

Would you mind walking us through the calculation you are referring to in more detail? I'm not sure that I fully follow.

Answer 5

Hi Lukas, Well spotted - there was a mistake in the exhibit. I've seen that Valentine and the PrepLounge team have al... (read entire answer)

Hi Lukas, Well spotted - there was a mistake in the exhibit. I've seen that Valentine and the PrepLounge team have already taken care of it. If you would like a more detailed di... (read entire answer)

Answer 6

Glassdoor is a good datapoint for that type of salary questions. Not 100% reliable, but directionally right (as long... (read entire answer)

Glassdoor is a good datapoint for that type of salary questions. Not 100% reliable, but directionally right (as long as they have a relevant number of datapoints).

Answer 7

Hi there, There's no concrete answer here on how to optimize this! However, what I can recommend is picking the 1-2 o... (read entire answer)

Hi there, There's no concrete answer here on how to optimize this! However, what I can recommend is picking the 1-2 offices where you legitimatelly have a connection and apply t... (read entire answer)