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Why do organisations normally charge overheads to products in addition to the direct costs involved in making the products?
Wiki User
∙ 15y ago
To make a profit of course, simple business
To cover ALL the costs of making a product. For example - A used car lot does not include the electric bill as a part of costs of goods sold, it is an operating expense (overhead - not specifically tied to any product, but necessary to make all products). However if the used car dealer only made a profit off of each car he sold and did not recoup the electric bills, the electric company would shut off the service and he would be out of business.
Wiki User
∙ 15y ago
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