Fixed overhead remains the same at all activity levels becuase its FIXED....
I have spent the better part of this evening trying to get into my head why a fixed cost such as F O/H stays the same. I understand that its fixed... duh... But thats only at a certain activity level. I now also understand that the costs remain fixed within a range of activity. If the level of activity increases outside of the range then the fixed overhead would also change. But as luck would have it text books fail to mention this... And ofcourse all exercies have different budgeted and actual activity levels (for variable overhead), but fail to mention if the costs are within the range or not, which is why I was confused.
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