ECONOMICS

Detailed explanation-1: -Overapplied overhead occurs when expenses incurred are actually less than what a company accounts for in its budget. This means that a company comes in under budget and achieves a lower amount of overhead costs during the accounting period. Businesses must account for overapplied overheads as well.

Detailed explanation-2: -Overapplied overhead occurs when the total amount of factory overhead costs assigned to produced units is more than was actually incurred in the period.

Detailed explanation-3: -Overapplied Overhead If the applied overhead exceeds the actual amount incurred, overhead is said to be overapplied.

Detailed explanation-4: -If manufacturing overhead has a credit balance, the overhead is overapplied, and the resulting amount in cost of goods sold is overstated.