What type of costs does Indirect Overhead refer to?

Indirect Overhead refers to costs that are not directly tied to the production of a specific good or service but support the overall operations of a business. In this context, option B accurately describes operational costs related to the main office. These expenses may include utilities, rent, administrative salaries, and other general expenses necessary for the company to function but that cannot be directly assigned to a particular project or product line.

Understanding indirect overhead is crucial for budgeting and financial planning, as these costs contribute to the overall expense structure of the organization. They play a vital role in pricing strategies and profit margins since they need to be covered to ensure business sustainability.