An overhead cost is how much one of those strange transparent sheets displaying machines costs. I can only imagine the collector’s value for antiquated teaching equipment.

In business, an overhead cost is a fixed expense that is not linked to any specific product or service provided. An overhead cost is a repeated expense that the business requires to continue operating smoothly. Some prominent examples would be:

  • Rent
  • Property taxes
  • Insurance
  • Office Supplies
  • Overtime
  • Utilities
  • And more

There exist three major types of overhead expenses:

  • A fixed overhead cost is static and fails to change in its amount. The most common example is rent, which rarely changes and will not change unexpectantly. After a cost has become a fixed cost, it must wear a cone to prevent the tearing of the contract.
  • Typically, this cost will vary depending on whatever dark magic is used to calculate it, like heating and electricity, which are rarely the same from month to month.
  • Semi-variable. To be extra confusing, a semi-variable includes both types above, wherein this cost will come with a fixed price that won’t change and a fluid one that will. Contracts will occasionally contain these, with a base price for services and a custom price for additional services beyond the original scope.