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Overhead

by Lea Strickland | Jul 31, 2010 | Glossary

Cost or expense (such as for administration, insurance, rent, and utility charges) that (1) relates to an operation or the firm as a whole, (2) does not become an integral part of a good or service (unlike raw material or direct labor), and (3) cannot be applied or traced to any specific unit of output. Overheads are indirect costs.

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