Which are examples of corporate overhead?

• A. Direct Labor Costs
• B. Raw Material Purchases
• C. Human Resources, Medical Records, Billing, Marketing, and Executive Directors
• D. Shipping Costs

Answer: (C)

Corporate overhead consists of costs that support the organization as a whole and cannot be traced directly to a single product or service. These are the administrative and strategic functions that keep the business running across all activities. The set that fits this idea includes Human Resources, Medical Records, Billing, Marketing, and Executive Directors because they provide services across the entire company rather than contributing to a specific product line. They represent salaries and expenses that enable operations but aren’t tied to producing a particular unit.

Direct labor costs are wages paid to workers who are directly involved in making products; these are clearly tied to production and thus are not overhead. Raw material purchases are the inputs used to create products, so they are also direct costs. Shipping costs typically fall under distribution or selling expenses—related to delivering products to customers or moving materials, rather than corporate-wide support—so they are not considered corporate overhead.