Get Clarity by Availing Planning of Variable and Fixed Overhead Costs Assignment Help
Planning of Variable and Fixed Overhead Costs is an important area of decision making in any organization. It is a really crucial topic to understand in the subject of cost accounting, and without its knowledge, you won’t be able to excel in the subject. Thus it is highly suggested to get planning of variable and fixed overhead costs homework help for in-depth understanding.
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An Idea about Planning of Variable and Fixed Overhead Costs
Overhead costs are basically those which can’t be directly linked with the production process but are necessary for the general running of any business. It includes costs like rent, office supplies, insurance premium, interest, taxes, telephone bills, etc. Fixed overhead costs don’t change with production level example rent, insurance, salaries, etc. The variable overhead costs change with the level of business activity and production example supplies, utilities, etc.
It is necessary to plan variable and fixed overhead costs so that they can be kept at reasonable levels at all the times. If these overhead costs fluctuate too much, then it can have a significant effect on the profits, and that is why management is always focused on keeping them in control through efficient planning process.
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The importance of Planning of Variable and Fixed Overhead Costs
The importance of Planning of Variable and Fixed Overhead Costs is discussed as follows –
- The management along with the accounting department decides the optimum range of fixed overhead costs and variable overhead costs, for the best allocation of resources.
- The planned level of these overhead costs is communicated to the respective departments so that they can comply with this agenda and thus can avoid any sort of
- By planning fixed and variable overhead costs a lot of duplication is avoided as the guidelines are always there about the costs to be incurred at each point of time.
- It helps in achieving higher rates of margin.
- Responsibilities at every level of the organization can be fixed if proper planning is done in relation to fixed and variable overhead costs.
- It immediately helps in checking whenever the company diverges from its correct route as the plan acts as a guideline, and then necessary steps are taken to keep the costs under control.
It is an important point to note that however strong may be the planning related to variable and fixed overhead costs, but the businesses always have to face unforeseen situations thus backup plans may also be needed in case of emergency situations. For a firm understanding about all these areas make it a priority to get planning of variable and fixed overhead costs assignment help.
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