Question

Back .. AT&T 3:31 PM Discussion Details Back ACCT-140-40: Managerial Accounting - Spring 20... 3. In addition, from Thursday through Sunday, think about Applied Overhead. What types of error or poor estimates might cause Applied Overhead to be either very low or very high compared to Actual Overhead. What's an example of a problem that might develop as a result of that error or poor estimate? Would that error most likely make the Actual Overhead lower or higher, all other things equal? NOTE: Only one member of your group should post the initial response. Please title your response, 'Group (X): Initial Response' so that we can keep everything organized Please submit your initial post by Thursday at 11:59 pm and all follow-up posts by Sunday at 11:59 pm. The discussions grading rubric is used for this assignment. Reply Dashboard Calendar To Do Notifications Inbox

Answer 1

There are various reasons why appliee vs actual over may vary. One reason would wrong cost driver. Example Rent. Best cost driver would b floor area occupied by machine. If it s allotted based on machine then cost variation may be huge. The unapplied may be huge if there is error in Estimate.