Abstract The article presents a retrospective view of J. Maurice Clark's book "Studies in the Economics of Overhead Costs." Clark defined overhead costs as indirect costs and noted that overhead costs do not change proportionately with changes in the volume of output. While the distinction between overhead as costs which cannot be traced directly to units of output was important, it is the lack of proportionate variability of overhead with output which was really central to the theme of Clark's book. The importance of concentrating on differential costs in decision-making meant that overhead must be treated differently from direct or variable costs. Clark emphasized that while the appropriate relevant cost concept to be applied in making most decisions was the differential cost concept, there was no one simple enumeration of cost elements which would suffice for all decision contexts. To illustrate this, Clark devoted a complete chapter to identifying what costs would be appropriately used in making nine different decisions occurring over the life history of an imaginary plant.
Werner G. Frank (Sat,) studied this question.