The difference between the actual overhead costs and the applied overhead costs

The difference between the actual overhead costs and

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actual overhead costs with the predetermined estimates. The difference between the actual overhead costs and the applied overhead costs are called the overhead variance. Underapplied Overhead When the actual amount of overhead expenses exceeds the applied amount of overhead expenses, the difference is called underapplied overhead. The predetermined rate underestimated the overhead costs for the period, and the applied overhead expenses were lower than the actual overhead expenses. The predetermined rate did not apply enough overhead expense for the period, so the difference is called underapplied overhead. Overapplied Overhead When the applied amount of overhead expenses exceeds the actual amount of overhead expenses, the difference is called overapplied overhead. The predetermined rate overestimated the overhead costs for the period, and the applied overhead expenses were higher than the actual overhead expenses. The predetermined rate applied too much overhead expense for the period, so the difference between the two amounts is called overapplied overhead.
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