What do you mean by office and administrative overhead?

Office and administrative overheads are the indirect costs that are incurred in connection with the general management and administration of the organisation. These costs are essential for the day-to-day functioning of the office but are not directly related to the manufacture or sale of any specific product.

Office and administrative overheads include:

• Indirect materials — e.g., printing and stationery used in the office.
• Indirect labour — e.g., salary of office manager, salaries of administrative staff.
• Indirect expenses — e.g., office rent, audit fees, telephone bills, depreciation of office equipment, postage and telegrams, legal and professional fees.