In cost accounting, expenses likeelectricity, water, heating, rent, and factory insuranceare typically categorized asoverhead costs(often calledindirect costsorindirect manufacturing costs).

From aBusiness Process Management (BPM)andOMG value-chainview:

These costssupportcore operational processes (production, service delivery) butcannot bedirectly tracedto a single product, unit, or customer.

In process modeling (e.g., usingBPMN), they are part of theresourcesandenvironmentneeded to perform activities, not attributed to one specific activity output.

Why the other options are incorrect:

A. Labor costs– Labor can bedirect(e.g., assembly worker) orindirect(e.g., supervisor), but electricity and water are not labor.

B. Variable costs– Electricity and water canbehavevariably with activity level, but in cost accounting terminology they are classified asoverhead, not as primary variable costs like direct materials.

D. Indirect materials costs– Indirect materials are items like lubricants, cleaning supplies, small tools. Electricity and water areutilities, not materials.

So in standard cost accounting and in how OMG-aligned enterprise models group resource costs,electricity and water are treated as overhead costs.