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overhead


 
TERM OF THE DAY

overhead

1. Resource consumed or lost in completing a process, that does notcontribute directly to the end-product. Also called burden cost.
2. Accounting: A cost or expense (such as for administrationinsurancerent, and utility charges) that (1) relates to an operation or the companyas a whole, (2) does not become an integral part of a good or service (unlike raw materialor direct labor), and (3) cannot be applied or traced to any specific unit ofoutput. Overheads are indirect costs.
3. Data communicationsData bits added to user-transmitted data, for carrying routing information and error correcting and operational instructions.
4. UtilitiesEnergy or water lost during delivery from the generating orproduction plant to the end user.
Learn more about this term
Usage Example
The company's net profits ended up being less than predicted because of unexpected overhead costs in the quarterly budget such as building a new factory.
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