OVERHEADS

[Audio] OVERHEADS. Wavy 3D patterns. OVERHEADS.

[Audio] What are overheads?. Black and white buildings.

[Audio] Overhead refers to the ongoing business expenses not directly attributed to creating a product or service. It is important for budgeting purposes but also for determining how much a company must charge for its products or services to make a profit. In short, overhead is any expense incurred to support the business while not being directly related to a specific product or service..

[Audio] Types of Overhead. Top view of a circular staircase.

[Audio] Overhead expenses can be fixed, meaning they are the same amount every time, or variable, meaning they increase or decrease depending on the business's activity level. Overhead expenses can also be semi-variable, meaning the company incurs some portion of the expense no matter what, and the other portion depends on the level of business activity..

[Audio] Examples of Overhead Rent and Utilities Administrative Costs Insurance Employee Perks.

[Audio] Why Is Overhead Cost Important?. Why Is Overhead Cost Important?.

[Audio] Overhead cost is important because it is the cost to run your business. Understanding and managing your overhead well, particularly how it relates to your business output, will help ensure your business is profitable and to obtain the best margins you can on your sales..