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The Risks of ECT ​

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The risks of ECT ​


Definitions:

Overapplied

refers to a situation where the allocated overhead costs exceed the actual overhead costs incurred.

Manufacturing Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor, such as maintenance and utilities.

Raw Materials Inventory

The total cost of all the raw materials that are currently stored by a company and ready to be used in production.

Underapplied

Underapplied refers to a situation where the actual manufacturing overheads are more than the overheads applied to products or services based on the predetermined overhead rate.

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