Accounting- What is the difference between fixed and variable overhead. What are fixed expenses?

Question

What manufacturing expenses qualify as fixed expenses?

Answer 1

the fixed overheads are the ones that do not change regardless to how much you produce, variables are the ones that vary depending on the number of units you produce.

e.g. for fixed; the managesr salary, and the buillding rent.

Sometimes the variable costs such as the machine operators' salary could be fixed, depending on the nature of the business and contracts that they sign. You can sign a contract with the workers that you pay them based on the hours they work not the number of unit they produce, in this way this will be a fixed like the rent.

Answer 2

Fixed transactions costs are a set amount of transaction costs that don't fluctuate while variable transactions costs can change given a certain event takes place or when a certain amount of time is up, as well as for any other reason the person who sets the fees feels like putting into the contract or agreement at the time of signing. For example a shift in the market for home buying can make mortgage lending rates go up or down. Another example would be if you only pay a certain amount per month and then after a certain period of time the amount you pay will go up, that's an example of a variable transaction. Another way it can be taken is if you own a business and your rent is the same every month that's a fixed cost. If for some reason, one of your vendors can't make a delivery and you have to use an alternate vendor that costs more than your regular guy to cover where the first guy couldn't make the delivery that is an example of a variable cost as well. I hope this has helped you. Excellent Question! -James

Answer 3

Variable Overhead

Answer 4

Fixed expenses are those that are not affected by the number of units produced. Rent is a good example because you have to pay the same amount of rent expense whether you make 100 units or 1000.

Answer 5

Fixed manufacturing overhead are overhead costs incurred in support of the manufacturing process that can not be directly allocated to specific items, and do not vary with production changes as do direct material and labor costs. Examples include rent or mortgage payments for plants/buildings related to manufacturing, depreciation on fixed assets (such as manufacturing equipment), salaries and associated payroll costs for employees related to any manufacturing portion of a business, liability and other insurance, and utilities.

Variable manufacturing overhead are overhead costs incurred in support of the manufacturing process that vary with changes in production levels such as direct material or labor (wage) costs.

Answer 6

Rent, wages are examples of fixed expenses. Variable expenses are things like your driver's/deliverer expenses, which will be based on the number of times the driver makes deliveries.

Answer 7

The space you rent. Same cost every month. Vehicial cost per month/ payment is the same. Anything that has the same out going cost each month. Variables would be electric costs, materials for jobs, etc.

Answer 8

what is amortgage