Variable Overhead

Marketing dictionary

Variable Overhead

All of the expenses, other than labor, which fluctuate on a monthly basis depending on sales and costs. The variable overhead for a typical business might include such things as the cost of telephone service, office supplies and product packaging, as well as promotional expenses like printing, mailings advertising and website maintenance. Variable overhead costs tend to be higher when a business is engaged in a greater number of transactions, a higher level of production, or other situations in which more business events take place. The opposite of fixed overhead costs such as payroll and insurance, which generally remain static.

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