ECONOMICS

Detailed explanation-1: -Total cost is the sum of fixed and variable costs of production.

Detailed explanation-2: -Fixed overhead costs are costs that do not change even while the volume of production activity changes. Fixed costs are fairly predictable and fixed overhead costs are necessary to keep a company operating smoothly. However, profit margins should reflect the costs of fixed overhead.

Detailed explanation-3: -Overhead costs are those that are not directly related to the production of goods or services, but are necessary for the operation of a business. Examples of overhead costs include rent, utilities, insurance, legal fees, office supplies, advertising, payroll, and accounting fees.

Detailed explanation-4: -Overhead costs, also known as fixed costs or just overheads, are expenses a company is committed to paying regardless of its output. They are shown in the operating expenses (OPEX) section of a company’s profit and loss account.