Companies can categorize their expenses into two categories: direct expenses and indirect expenses. Direct expenses are those that contribute directly to the product or service. The American Heritage ...

Many of the costs a business incurs doing business come down to its ability to deliver a product or service to customers. But not all of them. Companies need to consider overhead costs as well. These ...

Restaurants are businesses with high overhead costs and a high potential for waste. The two largest expense categories are labor and food and beverage. Food and beverage expenses are categorized on ...

The overhead ratio measures how much of a company's total revenue is spent on indirect costs. This metric is useful for identifying areas where costs can be reduced to improve profitability. Analyzing ...

Learn how the flow of costs impacts manufacturing firms, covering raw materials, work-in-process, finished goods, and cost of goods sold with practical examples and methods.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Costs in a business are traditionally divided into operating and administrative categories. Both are necessary for the company, but operating costs are closely tied to specific products and services ...