If more overhead was applied than had been incurred,the balance in the manufacturing overhead account represents the amount of overapplied overhead.

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If more overhead was applied than had been incurred, it means that the overhead applied to production exceeded the actual overhead costs incurred. In this case, the manufacturing overhead account will have a credit balance, which represents the overapplied overhead. Overapplied overhead occurs when the predetermined overhead rate (POHR) is too high or when there are less actual overhead costs incurred than estimated. The balance in the manufacturing overhead account is adjusted at the end of the period by allocating the overapplied amount to cost of goods sold, finished goods, and work in process inventory.

If More Overhead Was Applied Than Had Been Incurred,the Balance