Actual overhead

Actual overhead is indirect factory costs that have been incurred. This is essentially all factory costs, except for direct material and direct labor costs. Examples of actual overhead costs are:

  • Equipment maintenance
  • Factory depreciation
  • Factory insurance
  • Factory rent
  • Factory property taxes
  • Factory utilities
  • Production supervisor salaries
  • Production supplies

Actual overhead may differ from applied overhead, which can be based on a standard overhead rate that differs somewhat from the actual amount of overhead incurred.

Related Courses

Accounting for Inventory 
Cost Accounting Fundamentals