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Financial Terms | |
Fixed overhead |
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Definition of Fixed overheadFixed overheadThat portion of total overhead costs which remains constant in size
Related Terms:fixed overhead spending variancethe difference between the total actual fixed overhead and budgeted fixed overhead; fixed overhead volume variancesee volume variance absorption costinga cost accumulation and reporting noncontrollable variancethe fixed overhead volume variance; overhead spending variancethe difference between total actual overhead and total budgeted overhead at actual variable costinga cost accumulation and reporting method volume variancea fixed overhead variance that represents ![]() applied overheadthe amount of overhead that has been assigned to Work in Process Inventory as a result of productive activity; credits for this amount are to an overhead account Factory overheadAll the costs incurred during the manufacturing process, minus the Fixed-annuitiesAnnuity contracts in which the insurance company or issuing financial institution pays a Fixed assetLong-lived property owned by a firm that is used by a firm in the production of its income. Fixed assetAn item with a longevity greater than one year, and which exceeds a company’s Fixed asset turnover ratioThe ratio of sales to fixed assets. Fixed assetsThings that the business owns and are part of the business infrastructure – fixed assets may be fixed assetsAn informal term that refers to the variety of long-term operating Fixed AssetsLand, buildings, plant, equipment, and other assets acquired for carrying on the business of a company with a life exceeding one year. Normally expressed in financial accounts at cost, less accumulated depreciation. ![]() Fixed Assets Turnover RatioA measure of the utilization of a company's fixed assets to Fixed-charge coverage ratioA measure of a firm's ability to meet its fixed-charge obligations: the ratio of Fixed Charge Coverage RatioA measure of how well a company is able to meet its fixed Fixed costA cost that is fixed in total for a given period of time and for given production levels. fixed costa cost that remains constant in total within a specified Fixed costA cost that does not vary in the short run, irrespective of changes in any Fixed costsCosts that do not change with increases or decreases in the volume of goods or services fixed costsCosts that do not depend on the level of output. Fixed-datesIn the Euromarket the standard periods for which Euros are traded (1 month out to a year out) are Fixed-dollar obligationsConventional bonds for which the coupon rate is set as a fixed percentage of the par value. Fixed-dollar securityA nonnegotiable debt security that can be redeemed at some fixed price or according to Fixed-exchange rateA country's decision to tie the value of its currency to another country's currency, gold Fixed Exchange RateAn exchange rate held constant by a government promise to buy or sell dollars at the fixed rate on the foreign exchange market. Fixed ExpensesCost of doing business which does not change with the volume of business. Examples might be rent for business premises, insurance payments, heat and light. fixed expenses (costs)Expenses or costs that remain the same in amount, Fixed-income equivalentAlso called a busted convertible, a convertible security that is trading like a straight Fixed-income instrumentsAssets that pay a fixed-dollar amount, such as bonds and preferred stock. Fixed-income marketThe market for trading bonds and preferred stock. Fixed-income securityA security that pays a specified cash flow over a Fixed Interest RateA rate that does not fluctuate with general market conditions. Fixed-location storageAn inventory storage technique under which permanent Fixed price basisAn offering of securities at a fixed price. Fixed-price tender offerA one-time offer to purchase a stated number of shares at a stated fixed price, Fixed-rate loanA loan on which the rate paid by the borrower is fixed for the life of the loan. Fixed Rate LoanLoan for a fixed period of time with a fixed interest rate for the life of the loan. Fixed-rate payerIn an interest rate swap the counterparty who pays a fixed rate, usually in exchange for a Intangible fixed assetsNon-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks). Longer-Term Fixed AssetsAssets having a useful life greater than one year but the duration of the 'long term' will vary with the context in which the term is applied. Non-production overheadA general term referring to period costs, such as selling, administration and financial expenses. overapplied overheada credit balance in the overhead account OverheadAny cost other than a direct cost – may refer to an indirect production cost and/or to a non-production expense. overheadany factory or production cost that is indirect to Overhead allocationThe process of spreading production overhead equitably over the volume of production of goods or services. overhead application ratesee predetermined overhead rate overhead costsoverhead generally refers to indirect, in contrast to direct, overhead efficiency variancethe difference between total budgeted overhead at actual hours and total budgeted Overhead rateThe rate (often expressed per hour) applied to the time taken to produce a product/service, used to allocate production overheads to particular products/services based on the time taken. May be calculated on a business-wide or cost centre basis. predetermined overhead ratean estimated constant charge per unit of activity used to assign overhead cost to production or services of the period; it is calculated by dividing total budgeted annual overhead at a selected level of volume or activity by that selected measure of volume or activity; it is also the standard overhead application rate Production overheadA general term referring to indirect costs. Semi-fixed costs Costs that are constant within a defined level of activity but that can increase or decrease when standard overhead application ratea predetermined overhead rate used in a standard cost system; it can be a separate variable or fixed rate or a combined overhead rate Tangible fixed assetsPhysical assets that can be seen and touched, e.g. buildings, machinery, vehicles, computers etc. total overhead variancethe difference between total actual overhead and total applied overhead; it is the amount of underapplied or overapplied overhead underapplied overheada debit balance in the overhead account at the end of a period; when the applied overhead amount is less than the actual overhead that was incurred variable overhead efficiency variancethe difference between budgeted variable overhead based on actual input activity and variable overhead applied to production variable overhead spending variancethe difference between total actual variable overhead and the budgeted amount of variable overhead based on actual input activity Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |