The overhead variable cost is the operating cost of a business that includes the cost of day-to-day expenses, such as rent, wages, fuel charges, and so on.

Explanation

The planning of variable overhead can be done in the following ways:

The management should focus on the activities that create a product that adds value for the customer without compromising on the product's quality.
The cost drivers should be used in an effective manner in order to minimize wastage and enable the management to carry out the process of cost-cutting effectively.

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The managerial planning in variable overhead cost can be done by focusing on the activities that increase the value for customers in the long run and by efficiently using cost drivers in those activities.

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Page 309

Horngren's Cost Accounting (17th Edition)See all exercises

Horngren's Cost Accounting (17th Edition)

Chapter 8, End of Chapter, Questions, Exercise 8-1

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Explanation

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