Overhead Cost Analysis

Overhead Cost Analysis involves examining the indirect expenses of running a business—those costs not directly tied to producing a product or service, like rent, utilities, and administrative salaries. The goal is to understand these costs so businesses can allocate them properly to products, set accurate prices, and identify areas to cut expenses. By analyzing overhead, companies can improve profitability and efficiency, ensuring they remain competitive while effectively managing their overall financial health. This process is crucial for informed decision-making and strategic planning.