Fixed Business Costs
An increase or decrease in the cost of overhead can also affect a company's net profit margin. Overhead represents fixed costs for the business. Examples of overhead include management salaries, rent expenses and depreciation expenses. As fixed costs, businesses have to pay overhead expenses on an ongoing basis, and these costs will not fluctuate with the volume of units produced or sold. Even though these costs will not change based on sales or production volume, fixed costs still affect the profit margin for the company.