What are overheads in accounting?
Overheads are ongoing business expenses which are not directly linked to producing goods or delivering services. They support general operations.
What are examples of overheads?
Examples include rent, utilities, office salaries, insurance, and administrative costs.
Why are overheads important?
They impact overall profitability and must be covered by revenue. Poor control of overheads reduces profit margins.
How do overheads differ from direct costs?
Direct costs relate to specific products or services, while overheads support the business as a whole.
How can businesses manage overheads?
Businesses manage overheads through budgeting, cost control measures, and regular financial reviews.