Overhead expenses refer to the ongoing expenses of operating a business that cannot be conveniently traced to or identified with any particular revenue unit, unlike operating expenses such as raw material and labor). Overhead costs are necessary to support the business to carry out profit-making activities, but they do not directly generate profits). Overhead expenses are all costs on the income statement except for direct labor, direct materials, and direct expenses). Examples of overhead expenses include accounting fees, advertising, insurance, interest, legal fees, labor burden, rent, repairs, supplies, taxes, telephone bills, travel expenditures, and utilities). There are two types of business overheads: administrative overheads and manufacturing overheads). Administrative overheads are expenses related to the general operation of the business, while manufacturing overheads are expenses related to the production of goods. Overhead costs can be fixed, variable, or a hybrid of both. It is important to monitor overhead costs as they can drain a business unnecessarily when not properly controlled.