Overhead costs include, Rent and Rates of premises, Utilities such as electricity and water charges, Direct costs include, payment to suppliers,staff wages, and payments of taxes, any day to day running costs.
What Is Difference Between Overhead Cost And Direct Cost?
(a) The features distinguishing between direct costs and overhead
Direct cost is that cost which you will incur in way of running your business, such as your main plant & machinery etc without which you cannot run the business.
Overheads are supplementary costs such as telephone bills, legal fees, stationery etc. They are over and above the direct cost.
Overheads are supplementary costs such as telephone bills, legal fees, stationery etc. They are over and above the direct cost.