What are Overheads or Indirect expenses? Mention three types of Overhe

1.	What are Overheads or Indirect expenses? Mention three types of Overheads with an example of each.
Answer» Overhead or indirect expenses are those expenses which cannot be charged to production directly or cannot be identified with a specific product or job. These are incurred in planning and controlling the business operations. Three types of overhead expenses are: 1. Factory Overheads: Consumable stores like Lubricants, Grease etc. used for the smooth working of machines. 2. Office Overheads: These expenses are incurred in the process of managing business Activities e.g. office rent, salary of office manager etc. 3. Selling Overheads: These expenses are incurred in selling and distribution of goods and services, e.g. advertising expenses, sales commission etc.

What are Overheads or Indirect expenses? Mention three types of Overheads with an example of each.

Answer»

Overhead or indirect expenses are those expenses which cannot be charged to production directly or cannot be identified with a specific product or job. These are incurred in planning and controlling the business operations.

Three types of overhead expenses are:

1. Factory Overheads: Consumable stores like Lubricants, Grease etc. used for the smooth working of machines.

2. Office Overheads: These expenses are incurred in the process of managing business Activities e.g. office rent, salary of office manager etc.

3. Selling Overheads: These expenses are incurred in selling and distribution of goods and services, e.g. advertising expenses, sales commission etc.

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