This glossary uses Visual Finance™ to bring financial terms to life. Each example shows data from the Round Number Company, a fictional business with simplified figures to make learning easier. For more details, visit 'How to Read Visual Finance'.
Factory Overheads are costs that are connected directly to the production of goods and services but they are not identified as labor or materials. Examples include Depreciation of equipment at a production site, rent for a retail site, utilities for locations other than corporate offices.
The reporting of these costs will vary by company - some or all of these costs can be:
Admin Overheads are a different kind of overhead--they are not directly connected to the production of goods and services. Admin Overheads are reported in Selling, General & Administrative (SG&A)
Factory Overheads might be called Site Overheads in non-manufacturing industries.
See also Direct Cost, Semi-variable Costs.
The above is our generic explanations of common corporate financial terminology. Actual meanings can vary widely from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"
term list.