Overhead Cost Calculator
Professional overhead cost calculator for woodworking businesses. Calculate shop overhead, fixed costs, variable expenses, and overhead rates with comprehensive business cost analysis and optimization strategies.
⚠️ BUSINESS COST ANALYSIS NOTICE
Accurate overhead calculation is critical for business sustainability. Include all business expenses and review costs regularly. Underestimating overhead can lead to unprofitable pricing and business failure.
Business Cost Parameters
Business Type
Fixed Costs (Monthly)
Variable Costs (Monthly)
Business Parameters
Cost Analysis
Add your business costs and parameters to calculate comprehensive overhead analysis and cost optimization strategies for your woodworking business.
Fixed Cost Analysis
Comprehensive tracking of fixed business expenses including rent, insurance, equipment payments, and utilities for accurate overhead calculation.
Variable Expense Tracking
Monitor variable costs such as consumables, maintenance, marketing, and administrative expenses that fluctuate with business activity.
Overhead Rate Calculation
Calculate accurate overhead rates per hour and percentage of direct costs to ensure proper pricing and business profitability.
Cost Per Hour Analysis
Determine true cost per billable hour including all overhead expenses to establish minimum pricing requirements for sustainability.
Business Optimization
Identify cost reduction opportunities and efficiency improvements to optimize overhead structure and improve profitability.
Financial Planning
Strategic financial planning with contingency buffers and profit margins to ensure business sustainability and growth potential.
Frequently Asked Questions
Include all business expenses not directly tied to specific projects: shop rent/mortgage, utilities, insurance, equipment payments, tool maintenance, administrative costs, marketing, and professional services. Don't include direct materials or direct labor.
Overhead rate = (Total Monthly Overhead ÷ Monthly Direct Labor Cost) × 100. Alternatively, calculate overhead per hour = Total Monthly Overhead ÷ Billable Hours per Month. Typical rates range from 50-150% depending on business type.
Fixed costs remain constant regardless of production volume (rent, insurance, equipment payments). Variable costs change with business activity (consumables, utilities, maintenance). Understanding this helps with pricing and capacity planning.
Review monthly for accuracy, quarterly for trends, and annually for strategic planning. Update immediately when major costs change (rent increases, new equipment, insurance changes). Track actual vs. budgeted overhead monthly.
Typical billable percentages: Solo craftsperson 60-75%, Small shop 70-80%, Production shop 80-85%. Account for setup, cleanup, maintenance, admin, marketing, and business development in non-billable time.
Strategies include: negotiate better rates (insurance, utilities), improve efficiency to increase billable hours, share space/equipment, automate administrative tasks, review subscriptions/services, and optimize energy usage. Focus on cost per billable hour reduction.