In business, overhead or overhead expense refers to an ongoing expense of operating a business. Overheads are the expenditure which cannot be conveniently traced to or identified with any particular revenue unit, unlike operating expenses such as raw material and labor.
What is an example of an overhead cost?
Examples of Overhead Costs
- Rent. Rent is the cost that a business pays for using its business premises. ...
- Administrative costs. ...
- Utilities. ...
- Insurance. ...
- Sales and marketing. ...
- Repair and maintenance of motor vehicles and machinery.
What is meant by overhead cost?
Overhead refers to the ongoing costs to operate a business but excludes the direct costs associated with creating a product or service. Overhead costs can be fixed, variable, or a hybrid of both.
