Response to the following problem:
Atlanta Company is preparing its manufacturing overhead budget for 2012. Relevant data consist of the following.
Units to be produced (by quarters): 10,700, 12,500, 14,600, 16,200.
Direct labor: Time is 1.6 hours per unit.
Variable overhead costs per direct labor hour: Indirect materials $0.81; indirect labor $1.30; and maintenance $0.65.
Fixed overhead costs per quarter: Supervisory salaries $37,880; depreciation $18,140; and maintenance $13,130.
Having trouble understanding the Variable costs.