Which one of the following is typically NOT included in Indirect Overhead?

Indirect overhead refers to costs that are not directly tied to a specific project or product but are necessary for the overall operation of the business. These costs support the production process and include expenses like administrative costs, utilities, office supplies, and salaries of employees not directly involved in a specific project.

The correct answer is that direct material expenses are typically not included in indirect overhead. Direct material expenses are classified as direct costs because they are specifically associated with the production of goods or services. These costs can be traced directly to the manufacturing process and are essential for the creation of a product.

In contrast, corporate officers' salaries, monthly telephone charges, and utilities for the office are all considered indirect overhead expenses. These costs support the business functions as a whole rather than a specific project, making them essential for the overall administration and operation of the company. Understanding the distinction between direct and indirect costs is crucial for accurate accounting and budgeting in any business, particularly in fields such as construction, manufacturing, and project management.