The difference between overhead applied to work in process and actual overhead is

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Makai Nelson

Business

23 August, 09:16

The difference between overhead applied to work in process and actual overhead is

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Wolf · Answer 1

The major difference between overhead applied to work in process and actual overhead is over-applied overhead or under-applied overhead. This is because the actual overhead costs are debited as they are incurred while the applied overhead costs are credited as they are applied to the work in process which may lead to either over-applied overhead or under-applied overhead, depending on whether the incurred costs exceeded or fell short of the applied costs.