A type of overhead that is recorded under the cost-accounting method. Applied overhead is a fixed charged to a specific production job or department within a company. Applied overhead stands in contrast to general overhead, such as utilities or rent. Other forms of applied overhead include depreciation and insurance.
Applied overhead is usually allocated out to various departments according to a specific formula. Hence, a certain amount of overhead is therefore applied to a given department, such as marketing. The percentage of overhead that is applied to a given department may or may not correlate to the actual amount of overhead that was incurred by that department.
Investment dictionary. Academic. 2012.
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applied overhead — See: absorbed overhead … Accounting dictionary
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overhead absorption rate — Fin a means of attributing overhead to a product or service, based for example on direct labor hours, direct labor cost, or machine hours. The choice of overhead absorption base may be made with the objective of obtaining “accurate” product costs … The ultimate business dictionary
Applied Cost — A term used in cost accounting to denote the cost assigned to something, which may be different from the actual cost. Cost accounting, which compares costs of production to output produced, is often part of a company s decision making for many… … Investment dictionary
absorbed overhead — applied overhead; = recovered overhead The amount of the overhead of an organization charged to, or borne by, the production of that organization for the accounting period under consideration when the technique of absorption costing is used. The… … Accounting dictionary
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Underapplied Overhead — An accounting record in cost accounting where the overhead costs assigned for a work in progress product does not reach the amount of the actual overhead costs. Underapplied overhead is reported as a prepaid expense on the company s balance sheet … Investment dictionary