What is Fixed Manufacturing Overhead Incurred?

Fixed manufacturing overhead incurred is that component of factory overhead that does not vary with production volume. A business still incurs these costs, because they are necessary to the ongoing operation of the firm’s manufacturing operations.

Examples of Fixed Manufacturing Overhead Incurred

Examples of fixed manufacturing overhead incurred are rent, depreciation, the salaries of production managers, and insurance for the production facility. Thus, a production facility might enter into a lengthy facility lease to house its production equipment, and must pay the landlord the monthly lease payment even if it conducts no production operations at all.