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Definition
The ongoing administrative expenses of a business which cannot be attributed to
any specific business activity, but are still necessary for the business to function.
Examples include rent, utilities, and insurance.
Indirect Salaries
When a manager controls multiple jobs, you may track his salary as a direct cost by
allocating his costs to both jobs. If managers control multiple jobs at one time, you may
decide to consider their cost as overhead. Regardless of the manner chosen, consistency is
critical. If field management salaries charge to overhead for one contract, the same should
apply to all similar situations. Indirect salaries of home office employees also contribute to
the overhead expense pool.
4-retirement plans.
The construction company must pay these items on a regular basis, whether or not the
company is actually constructing something. When calculating a bid, the estimate must
include enough money to cover these expenses for the company to be profitable.
5-Rent, communications, and equipment used for more than one job also fall under the
heading of indirect overhead expenses.
Markup is the difference between the cost of a good or service and its selling price.[1] A markup is
added on to the total cost incurred by the producer of a good or service in order to create aprofit
Fixed markup[edit]