Week 7. Overhead Costs in Business. Accounting, Finance, SPSS Essay

Overhead Costs in Business
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Overhead Costs in Business
Overhead costs are in two categories; fixed overhead costs like rent and the variable overhead costs like energy bills. Fixed costs are constant over a long period while the variable costs change with the production; that is, if sales go up, the overhead costs also go up. That difference in expenses planning is the center of interest in this discussion.
The planning of fixed overhead costs means taking into account that the costs are locked in; therefore, a company, for instance, must choose the correct amount of investment that will benefit it for a long time. It involves planning for the best possible quality since adjustments cannot be made in between the term of the fixed overhead cost. Planning of fixed cost also creates the base cost for variable ...