ECONOMICS

Detailed explanation-1: -Overhead is the cost incurred in the course of making a product, providing a service or running a department, but which cannot be traced directly and in full to the product, service or department. Indirect expenses are also known as overheads. Overhead is actually the total of: Indirect materials.

Detailed explanation-2: -Overhead costs are those that are not directly related to the production of goods or services, but are necessary for the operation of a business. Examples of overhead costs include rent, utilities, insurance, legal fees, office supplies, advertising, payroll, and accounting fees.

Detailed explanation-3: -overhead (adv.) mid-15c., over-hed, “above one’s head, aloft, ” from over-+ head (n.) or from a survival of Old English oferheafod. The adjective, “situated above or aloft, ” is attested from 1874.

Detailed explanation-4: -Overhead is also known as burden or indirect costs. A subset of overhead is manufacturing overhead, which is all overhead costs incurred in the manufacturing process. Another subset of overhead is administrative overhead, which is all overhead costs incurred in the general and administrative side of a business.

Detailed explanation-5: -Overhead expenses include accounting fees, advertising, insurance, interest, legal fees, labor burden, rent, repairs, supplies, taxes, telephone bills, travel expenditures, and utilities.