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 ?
The value of each of these extra units includes 0.40 [pounds sterling] of absorbed overheads under absorption costing that wouldn't be included under marginal costing.
Finally, column (5) shows the absorbed overheads as $1600, i.e.