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Overhead Definition - What is overhead?

Overhead definition. Analyzing the definition of key terms often provides more insight about concepts. Overhead can be defined as – Factory activities supporting the production process that are not direct material or direct labor; also called factory overhead and manufacturing overhead. Manufacturing companies can break out inventory costs into three components of direct material, direct labor and overhead. Direct material and direct labor can be tracked to a specific job or process while overhead cannot. A company needs to include overhead into the cost of inventory and into a job or process overead cannot be allocated directly to a cost or process and is therefor grouped together into an account called overhead to be allocated to jobs or process using an estimate. Why Learn Accounting - Financial Accounting / Managerial Accounting    • Why Learn Accounting - Accounting Beginners   101 Double Entry Accounting System Explained - Accounting Equation    • Double Entry Accounting System Explained 1...   101 Cash vs Accrual - Cash Method / Accrual method differenc    • 101 Cash vs Accrual - Cash Method / Accrua...   101 Revenue Recognition Principle    • 101 Revenue Recognition Principle   Double Entry Accounting System Explained - Balance Sheet    • Double Entry Accounting System Explained -...   101 Income Statement Introduction    • 101 Income Statement Introduction   101 Accounting Objectives - Relevance Reliability Comparability    • 101 Accounting Objectives - Relevance Reli...   101 Transaction Rules - Accounting Equation    • 101 Transaction Rules - Accounting Equation   101 Transaction Throught Process / Steps - Accounting Equation    • 101 Transaction Thought Process / Steps - ...   101 Owner Deposits Cash Transaction Accounting Equation    • 101 Owner Deposits Cash Transaction Accoun...   101 Work Completed for Cash Transaction Accounting Equation    • 101 Work Completed for Cash Transaction Ac...   100.110 Pay Employee with Cash Transaction Accounting Equati    • 100.110 Pay Employee with Cash Transaction...   200 Debits & Credits Normal Balance - Double Entry Accounting Sy    • 200 Debits & Credits Normal Balance - Doub...   200 Debits & Credits - One Rule to Rule Them All    • 200 Debits & Credits - One Rule to Rule Th...