Examples of Overhead Cost
1. Rent and Utilities: Overhead includes the expenditures of maintaining the office or industrial space that businesses require in order to operate. This covers both rent and utilities, including water, gas, electricity, internet, and phone service. Additional expenses, such as a subscription to virtual meeting platforms like Zoom, must be included in a company’s overhead.
2. Administrative Costs: Administrative expenses are sometimes one of the most expensive components of a company’s overhead. This might include the expense of supplying the office with supplies, employee salaries, and external legal and audit costs.
3. Insurance: Businesses, depending on the industry, are obliged to carry a variety of insurance policies in order to function efficiently. These can include basic property insurance to safeguard the company’s physical assets from fire, flood, or theft, as well as professional liability insurance, employee health insurance, and auto insurance for company-owned vehicles.
4. Employee Perks: Many bigger organizations provide a variety of advantages to their employees, like keeping their offices stocked with coffee and food, offering gym discounts, conducting corporate retreats, and supplying company automobiles. All of these expenditures are considered overhead since they have no direct influence on the company’s products or services.
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