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Study Overhead lecture notes PDF with project management definitions and explanation to study What is Overhead?. Study overhead explanation with project management terms to review project management course for online MBA programs.

Overhead Definition:

  • Overhead is defined as a percentage of the direct costs of a particular project added to a contractor's proposal to cover indirect costs of doing business.

    Successful Project Management by Jack Gido and James P. Clements



Overhead Notes:

Overhead is a term used for the indirect costs of a project. Overhead refer to the costs that are incurred while doing a business or running operations of the organization/team but they are not directly related to the expenses of the activities of the project. A specific percentage of the direct costs is defined to cover the indirect costs (overhead). A contractor must include the overhead in the cost estimates while submitting a proposal for any particular project. Overhead can include both fixed and variable costs. Examples of overhead include advertising cost, insurance cost, rent, utility bills of the office, any travel cots, insurance, depreciation etc.

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