Overhead Costs
Definition of Overhead Costs as it relates to Business, Accounting Principles, Cost Accounting
Overhead costs, in the context of business, accounting principles, cost accounting, and overhead costs, refer to indirect expenses incurred in the production process that cannot be easily traced to individual units of output. These costs include items such as rent, utilities, insurance, depreciation, and administrative salaries, among others. Overhead costs are an essential aspect of business operations, and accurately accounting for them is critical to determining the true cost of producing goods or services, and ultimately, profitability.