Overhead Costs are all the expenses associated with running a business. Also called “overheads,” they are a mixture of the following:
- “Fixed costs” are recurring expenses like rent, insurance, and salaries that typically remain the same over time;
- “Semi-variable costs” differ over time but not significantly, like utility bills and sales commissions;
- “Variable costs” change over time because they depend on things that cannot be foreseen, like the price of raw materials and maintenance.