Overhead costs, also known as indirect costs, are costs that cannot be directly attributed to a cost object (e.g., product or order – see cost and activity accounting) and therefore must be allocated to the cost object using keys and surcharges. Examples of indirect costs include operating materials for a machine and administrative salaries. These overhead costs are also referred to as genuine overhead costs of the cost object.

However, there are also non-genuine overhead costs. These are direct costs that are not directly attributed to a cost object for reasons of economy or simplification.

Example of non-genuine overhead costs:
Auxiliary materials such as glue for a table. Although the glue could be directly assigned to the cost object table by precise measurement, the effort of measuring would not be in a sensible proportion to the knowledge gained.