overhead

Overhead

The expenses of a business that are not attributable directly to the production or sale of goods.

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Overhead

Costs that result from having and maintaining a business. Rent is a primary (and expensive) example of direct overhead, as are office supplies.

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overhead

See indirect cost.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

overhead

or

indirect cost

any COST that is not directly associated with a product, that is, all costs other than DIRECT MATERIALS cost and DIRECT LABOUR cost. Production overheads (factory overheads) include the cost of INDIRECT MATERIALS and INDIRECT LABOUR along with other production expenses like factory heat, light and power, and depreciation of plant and machinery. The cost of factory departments such as maintenance, materials stores and the canteen which render services to producing departments are similarly part of production overheads. Most SELLING COSTS and DISTRIBUTION COSTS and all ADMINISTRATION COSTS are also counted as overheads since they cannot usually be directly related to units of product. See also FIXED COST, STANDARD COST.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson