What is corporate overhead?

• A. Administrative expenses that may be centralized within a business
• B. Production costs
• C. Marketing campaign expenditures
• D. Research and development costs

Answer: (A)

Corporate overhead refers to the ongoing administrative and support costs that keep the whole organization running but aren’t directly tied to producing a specific product or service. These are the general expenses that enable operations across the company, such as executive leadership, human resources, accounting, legal, facilities, IT, and other shared services. They’re often centralized at the corporate level and allocated to cost objects through overhead rates or activity-based costing.

The best description captures this idea as administrative expenses that may be centralized within a business, reflecting the organization-wide, non-production nature of overhead. Production costs, marketing expenditures, and research and development costs describe more work tied to particular activities or functions, rather than the broad, centralized support costs that overhead represents.