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

1 comment:

Md. Shazzad Hossen said...
This comment has been removed by the author.

Popular Accounting Problems

The information on this site is for informational purposes only and should not be used as a substitute for the professional advice of an accountant, tax advisor, attorney, or other professional.