Which of the following is considered Company Overhead?

Company overhead refers to the ongoing expenses that a business must incur to maintain its operations, regardless of specific projects. This includes costs that are not directly tied to a single project but are necessary for the overall functioning of the company.

Office rent and legal fees fall under this category because they are fixed costs that the company must pay to keep its operations running. These expenses do not vary with the number of projects or the level of activity the company is engaged in. Therefore, they are classified as overhead since they support the business as a whole.

In contrast, project materials and supplies, employee salaries directly tied to projects, and equipment costs specific to a project are considered direct costs. They vary based on the specific project being undertaken and are contingent upon the work being performed. Understanding the distinction between overhead and direct costs is essential for effective budgeting and financial management within a contracting business.