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What do you mean by overhead?

Updated: 9/24/2023
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MukeshKumarfb8203

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9y ago

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The ongoing administrative expenses of a business which cannot be attributed to any specific business activity.

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9y ago
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Q: What do you mean by overhead?
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What overhead mean?

Overhead is the expenses for running a business. Such as electric, rent, payroll, etc. They are usually termed overhead expenses.


What is combined overhead variance?

Combined overhead variance = fixed overhead variance + variable overhead varianceFixed Overhead :which remains fixed and donot change upto certain level of productionVariable Overhead: which keep changing with the change in production units.


How do you determine the overhead rate when applying overhead costs?

Using direct labor hours: Overhead rate = Total Overhead Expenses /Direct labor hours Using Machine hours: Overhead rate = Total Overhead Expenses /Machine hours


What the meaning of blanket overhead rate?

Blanket overhead rate is the computation of a single overhead rate for one whole factory. Overhead rate is the percentage you get when comparing total overhead expenses to total expenses.


Applied overhead vs actual overhead?

APPLIED Overhead is computed using the predetermined overhead rate and is the amount of costs applied (or estimated) to be allocated (needed) for specific jobs. ACTUAL Overhead is found after the manufacturing process is complete which gives the actual amount of used/consumed resources (or total costs) that it needed to complete the job. The two amounts can then be compared afterward which is known as Under- or Overapplied Manufacturing Overhead. When Manufacturing Overhead has a DEBIT balance, overhead is said to be UNDERAPPLIED, meaning that the overhead applied to work in process or to the certain job is LESS than the overhead incurred. On the contrary, when manufacturing overhead has a CREDIT balance, overhead is OVERAPPLIED, meaning that the overhead assigned to work in process or to the certain job is GREATER than the overhead incurred.