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Indirect costs or overheads

Costs that are not directly related to a particular product or process such as rent, insurance, wages of office staff, depreciation of office equipment. Indirect costs are usually the same as fixed costs, but there are occasions where costs are indirect and variable, for example, energy costs. As a firm increases output, the energy bill increases but for a firm producing a range of different products the exact usage for each product line may not easily be established.

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