The monthly overhead of the pharmacy is $52,875.
What is the overhead?
The overhead refers to the costs or expenses for running a business. These expenses cannot be traced to any product or service unit
They tend to be mostly fixed in nature, though, some may exhibit semi-variable characteristics.
Some of the overhead costs include:
Rent
Utilities
Insurance
Office Supplies
Travel expenses
Salaries and wages
Advertising expenses
Accounting and legal expenses.
Data and Calculations:
Monthly sales $278,000
Inventory purchases $186,000
Overhead costs:
Salaries and wages $49,000
Utilities $2,000
Insurance $1,200
Maintenance $675
Total overhead = $52,875
Thus, the monthly overhead of the pharmacy is $52,875.
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