ECONOMICS

Detailed explanation-1: -Overhead costs refer to all indirect expenses of running a business. These ongoing expenses support your business but are not linked to the creation of a product or service.

Detailed explanation-2: -Indirect costs include costs which are frequently referred to as overhead expenses (for example, rent and utilities) and general and administrative expenses (for example, officers’ salaries, accounting department costs and personnel department costs).

Detailed explanation-3: -What Is Overhead? Overhead refers to the ongoing business expenses not directly attributed to creating a product or service. It is important for budgeting purposes but also for determining how much a company must charge for its products or services to make a profit.

Detailed explanation-4: -What are Overhead Expenses? Overhead expenses are the other portion of indirect costs and relate to projects, but not to just one. If you have no projects, then you have no overhead. Overhead supports the direct costs of the revenue generating projects of the company.

Detailed explanation-5: -These overhead costs are the ones left over after direct costs have been computed. The materials and supplies needed for a company’s day-to-day operations – such as computers, electricity and rent – are examples of indirect costs.