Applied Overhead

(redirected from Absorbed Overhead)

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.
References in periodicals archive ?
If projects are selected throughout the year based on how much overhead they absorb, the absorbed overhead can be managed so that it is only slightly higher than the actual overhead.
Otherwise, at the end of the year the absorbed overhead will not cover the actual overhead.
To represent knowing how projects absorbed overhead, an expert selected the projects from those typically available to The Company.
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.
Operating losses during the period resulted primarily from very low margins on some finished goods inventory sales due to increased labor and materials costs as well as under absorbed overhead costs experienced during the quarter.
Huffy Bicycle Company reported lower sales and earnings from those reported a year ago due to continued softness at retail which resulted in lower unit volume and under absorbed overhead expense.
Operating margins for the first nine months of 1995 were down due to the weak retail environment in the two most recent quarters, increased material costs, and under absorbed overhead expense resulting from lower than expected production volume.
Finally, column (5) shows the absorbed overheads as $1600, i.