Cost of Idle HQ Staff Included in Break-even Point Calculation?

12manage is hiring Management/MBA Students!


 
Break-even Analysis > Forum Log in

Cost of Idle HQ Staff Included in Break-even Point Calculation?
sweep, Member
Please let me know whether we should add the cost of the idle staff, not directly related to a project, when they are sitting in HQ, in the fixed cost to find out the BEP of that project.
 

 
Include Idle Staff in Break-even Point Analys
Jaap de Jonge, Editor
The basic principle of a BEP is that you want to give a realistic picture of a project by calculating how long it takes to recover the money that you have invested.
In doing so, you should include all the cost and all revenues that are related to undertaking that project (or not).
Now to your idle staff:
- If this staff is there to be available when needed for this kind of projects, then I think you should include (a reasonable percentage of) their cost. Even if they are probably not needed for this particular project.
- But if they are totally unrelated to a small-scale project and are plain HQ staff, then you shouldn't.
 

 











 

  Do you wish to study further? You can learn more from the summary, forum, discussions, lessons, courses, training, instructions, expert tips, best practices and education sources. Register.  


Special Interest Group Leader

You here


More on Break-even Analysis
Summary
Forum
Best Practices

Expert Tips

Resources



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2018 12manage - The Executive Fast Track. V14.1 - Last updated: 18-6-2018. All names of their owners.