Overhead
All production costs other than direct material and direct labor are lumped into one category called overhead. In a manufacturing firm, overhead is also known as factory burden or manufacturing overhead. The overhead cost category contains a wide variety of items. Many inputs other than direct labor and direct materials are needed to products. Examples include depreciation on building and equipment, maintenance, supplies, supervision, materials, handling, power, property taxes, landscaping of factory grounds, and plant security. Supplies are generally those materials necessary for production that do not become part of the finished product or are not used in providing a service. Dishwasher detergent in a fast-food restaurant and oil for production equipment are examples of supplies.