Define 'overhead costs'.

Overhead costs refer to the ongoing expenses of operating a business that are not directly tied to the production of goods or services. These costs are essential for the day-to-day functioning of the business and include things like rent, utilities, office supplies, and salaries of employees not directly linked to production.

While some costs, such as salaries, could be associated with overhead if they pertain to roles that support the business as a whole rather than specific products, the defining characteristic of overhead costs is their nature as indirect expenses necessary for maintaining operations. This distinguishes them from direct costs, which are specifically connected to the production process itself. In this context, overhead costs are crucial for understanding overall business expenses and profitability.