Overhead
Overhead is the general term for operating expenses which when subtracted from gross profit results in operating profit on the income statement.
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Expanded Definition
They are sometimes called SARE (Sales, Administration, Research and Engineering). They include:
- Research and development, engineering, IT
- Depreciation and amortization
- Selling, general, and administrative costs. These include:
- Selling expenses such as commissions to sales people.
- Various salaries, such as those for management
- Corporate headquarters expenses including the corporate jet
- Legal, accounting, professional services
- Marketing, advertising
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