# How are you supposed to calculate overhead expenses?

I'm doing a college assignment (creating a software product) in Computer Science and have been given a template for the part of the report about economics. At one moment it states the following:

To calculate overhead expenses we must multiply our overall salary by the coefficient of overhead expenses.

And later in the text it assumes that this coefficient is 1.2 without any context or explanation. This makes absolutely no sense to me. Am I missing something or is it wrong? If it is wrong, how am I supposed to calculate overhead expenses if every reasonable expense is already accounted for?