indirect expenses of running a business not directly associated with a particular item or service sold. For example, wages paid to factory workers and the cost of production materials are direct costs. Electricity, insurance, and benefits paid to workers are overhead expenses. By applying a factor called the burden rate, cost accounting attempts to allocate overhead, where possible, to the cost of goods sold.
- costs of a business that are not directly associated with the production or sale of goods or services. Also called , indirect cost and expense, burden and, in Great Britain, on costs.
- sometimes used in a more limited sense, as in manufacturing or factory overhead.
indirect expenses of running a business not directly associated with a particular item or service sold. For example, wages paid to factory workers and the cost of production materials are direct costs. Electricity, insurance, and benefits paid to workers are overhead expenses. By applying a factor called the burden rate, cost accounting attempts to allocate overhead, where possible, to the cost of goods sold.
