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Applied Overhead
(redirected from Absorbed Overhead)

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Applied Overhead
In cost accounting, the expense of each department in a company, allocated according to a predetermined formula. For example, a company may apply 60% of its overhead to R&D and 40% to its sales department. These percentages may or may not be based on the actual costs each department incurs.


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40 [pounds sterling] of absorbed overheads under absorption costing that wouldn't be included under marginal costing.
Otherwise, at the end of the year the absorbed overhead will not cover the actual overhead.
The industry team has also absorbed overhead costs of about $240 million that would have been passed onto the government under conventional NASA contracts, officials said.
 
 
 
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