Which of the following is an example of Indirect Overhead?

Indirect overhead refers to costs that are not directly tied to a specific project or labor but are necessary for the overall operation of a business. These costs support the entire operation and are necessary for the production of goods or services, but they cannot be directly traced to a specific cost object.

Utilities for the office fit this definition perfectly, as they represent ongoing expenses that contribute to maintaining the infrastructure of the business environment needed for various activities, including project management and administration. These costs are necessary for employees to work effectively, but they are not attributed to any single project.

In contrast, salaries for direct labor, material costs, and subcontractor payments are all examples of direct costs associated with specific projects. Direct labor is tied to man-hours worked on a particular job, material costs refer to the supplies needed for a project, and subcontractor payments are made for services that directly impact the completion of a project. Therefore, while they are essential to the operation, they do not qualify as indirect overhead.