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Overapplied
A situation in cost accounting where the allocated or applied manufacturing overhead costs exceed the actual overhead costs incurred.
Underapplied
A situation where the allocated manufacturing overhead cost is less than the actual overhead incurred.
Direct Labor-Hours
The total hours worked by employees directly involved in the manufacturing process, often used as a basis for allocating manufacturing overhead.
Predetermined Overhead Rate
An estimated rate used to assign manufacturing overhead costs to individual units of production, based on a specific activity base such as labor hours.