Question

The additional cost spent on transportation, maintenance, labour, repair, etc., expenses incurred are called _______.

• A. overhead expenses
• B. additional charge
• C. fixed amount
• D. cost price

Answer 1

The correct option is A overhead expenses

The additional cost spent on transportation, maintenance, labour, repair, etc., expenses incurred are called $\text{Overhead expenses}$.

Overhead expenses are those expenses that are required to run a business, but which cannot be directly attributed to any specific business activity, product, or service.

Thus, overhead expenses do not directly lead to the generation of profits. Overhead expenses are still necessary since they provide critical support for the generation of profit-making activities.