Overhead – General Definition
Those costs not directly tied to the production of revenue are referred to as overhead costs.
Those expenses not tied directly or indirectly with the production of goods or services rendered are referred to as general and administrative costs. Examples include officer compensation, facilities (rent, utilities etc.), front/back office operations, general insurance, governmental compliance and advertising.
General and administrative costs are illustrated in the lower section of the profit and loss statement (income statement). The result is customarily referred to as the operating income or operating profit.
Those costs not directly tied to the production of revenue are referred to as overhead costs.