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Predetermined Overhead Rate
A rate calculated before a period begins, used to apply manufacturing overhead costs to products based on a relevant activity, such as machine hours or labor hours.
Underapplied
Describes a situation where the allocated overhead costs in accounting are less than the actual overhead costs incurred.
Overapplied
A scenario in which the overhead cost assigned to manufacturing exceeds the overhead that was actually incurred.
Direct Labor-Hours
A measure of the labor directly involved in manufacturing a product, represented in hours.
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