Overhead (business)

In business, overhead or overhead expense refers to an ongoing expense of operating a business (also known as Operating Expenses - rent, gas/electricity, wages etc.). The term overhead is usually used to group expenses that are necessary to the continued functioning of the business but cannot be immediately associated with the products/services being offered^[1] (e.g., do not directly generate profits). Closely related accounting concepts are fixed costs versus variable costs and indirect costs versus direct costs.

Overhead expenses are all costs on the income statement except for direct labor, direct materials & direct expenses. Overhead expenses include accounting fees, advertising, depreciation, insurance, interest, legal fees, rent, repairs, supplies, taxes, telephone bills, travel and utilities costs.^[2]

Overhead can be classified under four headings:^{[citation needed]}

1. Functional classification.
2. Classification on the nature of expenditure.
3. Element-wise classification.
4. Classification on behavior of expenditure.

References

1. ^ PMO and Project Management Dictionary
2. ^ Putting Cost Back into Pricing: Calculating Overhead Percentages

This accountancy-related article is a stub. You can help Wikipedia by expanding it.v · Categories: Business terms Management accounting Business stubs Accounting stubs Wikimedia Foundation. 2010. Игры ⚽ Поможем решить контрольную работу Breezeway Ethyl acrylate Look at other dictionaries: Overhead — may be: Overhead (business), the ongoing operating costs of running a business Engineering overhead, ancillary design features required by a component of a device Computational overhead, ancillary computation required by an algorithm or program… …   Wikipedia Business overhead expense disability insurance — Business overhead expense (BOE) disability insurance pays the insured’s business overhead expenses if he or she becomes disabled. A BOE policy pays a monthly benefit based on actual expenses, not anticipated profits. It is designed for businesses …   Wikipedia overhead — over·head / ō vər ˌhed/ n: business expenses (as rent or insurance) not chargeable to a particular part of the work or product Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. overhead …   Law dictionary overhead — [ō′vər hed΄; ] for adv. [ ō΄vər hed′] adj. 1. a) located or operating above the level of the head ☆ b) designating a door, as of a garage, that moves into place overhead when opened 2. in the sky 3. on a higher level, with reference to related… …   English World dictionary Overhead projector — in operation during a classroom lesson An overhead projector is a variant of slide projector that is used to display images to an audience. Contents 1 Mechanism …   Wikipedia Overhead charges — O ver*head char ges, Overhead expenses O ver*head expenses, etc. (Accounting) Those general charges or expenses in any business which cannot be charged up as belonging exclusively to any particular part of the work or product, as where different… …   The Collaborative International Dictionary of English Overhead expenses — Overhead charges O ver*head char ges, Overhead expenses O ver*head expenses, etc. (Accounting) Those general charges or expenses in any business which cannot be charged up as belonging exclusively to any particular part of the work or product, as …   The Collaborative International Dictionary of English overhead — ► ADVERB ▪ above one s head; in the sky. ► ADJECTIVE 1) situated overhead. 2) (of a driving mechanism) above the object driven. 3) (of an expense) incurred in the upkeep or running of premises or a business. ► NOUN 1) an overhead cost or expense …   English terms dictionary Business rule — Business rules or business rulesets describe the operations, definitions and constraints that apply to an organization in achieving its goals. For example a business rule might state that no credit check is to be performed on return customers .… …   Wikipedia business expenses — index overhead Burton s Legal Thesaurus. William C. Burton. 2006 …   Law dictionary 18+ © Academic, 2000-2024 Contact us: Technical Support, Advertising Dictionaries export, created on PHP, Joomla, Drupal, WordPress, MODx. Mark and share Search through all dictionaries Translate… Search Internet Share the article and excerpts Direct link … Do a right-click on the link above and select “Copy Link”