Variable Overheads
The variable overhead is one which tends to vary directly with volume of output. The variable cost increases in direct proportion with the increase in production, and decrease in production. It is known as Direct cost.
Salesman’s Commission; Discounts to customers; Bad debts; Branch expenses; Postage; Stationery; Travelling; Salesman’s expenses; Packing charges; Carriage outward; Variable expenses on delivery vans; etc.
It means that a part of the expenses does not change while the other part of the same expense charges with volume of output. Generally, on costs are truly fixed or truly variable.
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