ECONOMICS

Detailed explanation-1: -Overhead Costs – Types Typically, there is no volatility in the overhead with increases or decreases in the production of a given product. Thus, it is considered to be a fixed cost. Common fixed costs include salaries for supervisors, managers, and administrative staff, rent for buildings, and tax liabilities.

Detailed explanation-2: -The fixed cost refers to a cost that doesn’t change regardless of the production output. In contrast, a variable cost is one that depends solely on the level of output. A semi-variable cost therefore combines the features of a fixed cost and a variable cost.

Detailed explanation-3: -Hi-low is linked to the idea of cost behaviour and is one method for splitting semi-variable costs into their fixed and variable elements. Making a distinction between fixed and variable costs in a semi-variable cost might be used: in product costing. to analyse profitability of a product or department.

Detailed explanation-4: -Wages are variable costs in a firm, as the number of employees required will vary based on the demand for production, therefore the wages paid to the total number of employees will vary with the number of employees.