Sunday, July 6, 2008

Underapplied and Overapplied Overhead

In a manufacturing company, the difference between the overhead cost applied to Work in Process (WIP) and the actual overhead costs incurred by the firm for a period is termed either underapplied or overapplied overhead.


Underapplied Overhead= Amount of applied overhead is less than actual overhead

Overapplied Overhead = Amount of applied overhead is greater than actual overhead

MOH has a DEBIT balance.
MOH has a CREDIT balance.


Additional Accounting Examples

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Md. Shazzad Hossen said...
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