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overhead

What is "overhead"?


What is overhead? Are there multiple types of overhead, or only one? What are some examples?


Solution

  • The business meaning of overhead cost explains it best. From Wikipedia:

    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 offered1 (e.g. do not directly generate profits).

    Overhead is a "cost" you will incur to be able to perform an operation; you need to "invest" some resource to perform the operation in question.