ECONOMICS

Detailed explanation-1: -Underapplied. If actual overhead incurred during an accounting period is greater than the amount of overhead applied to a job, this means overhead was underapplied to that particular job.

Detailed explanation-2: -Overapplied Overhead If the applied overhead exceeds the actual amount incurred, overhead is said to be overapplied. This is usually viewed as a favorable outcome, because less has been spent than anticipated for the level of achieved production.

Detailed explanation-3: -Over applied Overhead. Overhead that occurs when the applied overhead is greater than the actual overhead. Overhead Variance. Difference between applied overhead and actual overhead.

Detailed explanation-4: -When overhead has been overapplied, the proper accounting is to debit the manufacturing overhead cost pool and credit the cost of goods sold in the amount of the overapplication. Doing so results in the actual amount of overhead incurred being charged through the cost of goods sold.

Detailed explanation-5: -If manufacturing overhead applied exceeds the actual manufacturing overhead costs of the period, then manufacturing overhead is overapplied.