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Overhead Account
An account used to record the indirect costs of a business, which are not directly attributable to a specific product or service.
Overabsorbed Overhead
The amount of overhead applied is greater than actual overhead cost incurred.
Prospective Overhead Rate
An estimated rate used to allocate overhead costs to products or services based on future expected activities and expenditures.
Fixed Overhead
Fixed costs that do not fluctuate with the level of production or sales, such as rent, salaries, and insurance, required to run a business's operations.
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