Which term describes the indirect costs of operating a business, such as rent and salaries?

Which term describes the indirect costs of operating a business, such as rent and salaries?

• A. Overhead
• B. Overtime
• C. Pareto chart
• D. Outplacement

Answer: (A)

Overhead represents the indirect costs of operating a business, such as rent and salaries. These expenses are necessary for keeping the company running but aren’t tied to a specific product or service. Examples include office rent, utilities, administrative staff salaries, and depreciation. Overtime refers to extra pay for working beyond regular hours and isn’t the category for indirect operating costs. A Pareto chart is a quality tool used to prioritize problems by frequency or impact, not a cost category. Outplacement services help departing employees find new jobs. So overhead is the best term for these indirect operating costs.

Overhead represents the indirect costs of operating a business, such as rent and salaries. These expenses are necessary for keeping the company running but aren’t tied to a specific product or service. Examples include office rent, utilities, administrative staff salaries, and depreciation. Overtime refers to extra pay for working beyond regular hours and isn’t the category for indirect operating costs. A Pareto chart is a quality tool used to prioritize problems by frequency or impact, not a cost category. Outplacement services help departing employees find new jobs. So overhead is the best term for these indirect operating costs.