Overhead costs may be classified according to the function within the organisation responsible for incurring the cost. 

Some overhead costs relate to the organisation generally and may be referred to as general overhead.

This chapter focuses on how production overheads are absorbed into the products being manufactured

Examples of overhead cost classifications include:

Production overhead

Production/Manufacturing overhead concerned with the physical production of the product

Non-production overhead

Selling and distribution overhead concerned with the selling and distribution of the finished product

Administration overhead concerned with the general administration of the organisation.