How the overhead expanses calculated?

[outofmage]

I found overhead cost expanding quickly and its not 1%-3% of your revenue as the manual says about it. Sometimes it could go up to 15% of that year's revenue. Maybe it has something to do with the profit or the age of the company? Does anyone have a clue?

[akuenzi]

outofmage,

 

I'm not sure how it's calculated, but I do know it can be heavily impacted depending on what manager you have in place.  Some managers come with increased overhead, and others come with decreased overhead.  Did you change a manager in there somewhere that might have done this?  Or, did the underlying map have an event that somehow impacted overhead?

[outofmage]

 I think this is not the main reason. The manager do change the overhead but not so intense. Also, if you stick to one manager, the overhead will still fluctuate a lot especially  after you expand your revenue. 

[jeffryfisher]

I think that some infrequent expenses get lumped into overhead, so if you do something like sell an industry at half price, then you might see a spike in overhead.

[outofmage]

hi, jeffry

The infrequent expenses are under their own list. Selling industries lose is listed in industry profits. Bulldozing track or stations loses are listed under track maintenance, replacing or retire trains under train maintenance. I can't come up with another one that may be count as overhead and I don't think there is, because the manual said and I quot "Overhead is a figure that will generally run about 1 percent to 3 percent of your revenue. It represents the assorted costs of running a business—the taxes, fees, licenses, pens, notepads, yellow sticky-notes, coffee, phone bills, and so on."

[jeffryfisher]

That does leave a mystery then. I wonder if overhead is a function of how many stations (and how big). I don't see a "station maintenance" line anywhere, so maybe that's it (or part of it).

 

EDIT: Nope! Overhead is way to volatile to be anything that predictable. I just went back over several archived games, looking at income reports as far back as report could show. In one, revenue was tens of millions per year, but the overhead was exactly $1000 every year. Another game had mostly zeroes for overhead, but there were a couple of spikes. Other games had wildly fluctuating overhead values between 1% and 5% of revenue.

 

The zeroes teach us that overhead is not derived from anything that is with a company all of the time. That leads me to suspect that some player action(s) are generating overhead. Maybe we're spending money every time we edit a train's schedule of stops and consist. Wouldn't that be a kick in the head for micro-managers!

[outofmage]

Yes, that's exactly I'm talking about. It is a mystery. However, I do know that the player actions will not generate overhead, because I let the computer to manage the company (resign as chairman). The computer didn't change any of the routines I set up or expand to another city. Still, the overhead is ridicules. I guess the overhead is related to the average revenue or profit of recent years, that's why there is zero overhead.

[cogeo]

Don't know the formula, but it seems to be strongly related to the revenues (or maybe operational profits ie non-interest ones - I have some cash-only AIs with considerable profits, but almost zero overhead) of the last (two ?) previous years. Check your revenues, profits and overhead year-by-year to see what I mean.