What Is Variable Overhead And Fixed Overhead?
Variable overhead costs are expenses that fluctuate depending on the level of activity or production volume, such as indirect labor, supplies, and utilities. On the other hand, fixed overhead costs do not change with the level of production volume, such as rent and property taxes. These costs are often budgeted for in advance and can be difficult to change in the short term. Both variable and fixed overhead costs are important factors for businesses to consider when analyzing their financial performance and making decisions.