ECONOMICS

Detailed explanation-1: -Overhead expenses are all costs on the income statement except for direct labor, direct materials, and direct expenses. Overhead expenses include accounting fees, advertising, insurance, interest, legal fees, labor burden, rent, repairs, supplies, taxes, telephone bills, travel expenditures, and utilities.

Detailed explanation-2: -What Is the Difference Between Prime Cost and Overhead Cost? Prime costs are the direct costs involved in production, including raw materials and labor. By contrast, overhead costs refer to costs that are indirectly related to production, which include electricity, rent, or salaries, among others.

Detailed explanation-3: -Overhead cost is not the component of prime cost. The term “prime cost” refers to a production cost that only includes direct costs, such as the cost of raw materials, direct labour, and direct expenses, but excludes factory overheads.

Detailed explanation-4: -Overhead refers to the costs of running a business that are not directly related to producing a good or service. These costs can be fixed, such as rent, or variable, such as transport costs. They can also be semi-variable, such as utilities.