Tag Archives: Overhead Costs

Definition of Overhead

Cost pertaining to a cost centre or cost unit may be divided into two portions direct and indirect. The indirect portion of the total cost constitutes the overhead cost which is the aggregate of indirect material cost, indirect wages and indirect expenses.  CIMA defines indirect cost as expenditure on labour, …

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Importance of Overhead Costs

Overhead Costs Costs other than direct material and direct labour incurred in the manufacturing process are known as factory overheads costs or simply overhead costs. All factory overheads are indirect costs of the product. Some examples of factory overheads are: Heating and lighting the factory Repairing and maintaining factory equipment …

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