The term applied overhead refers to the element of direct labor hours or cost used in the CIM environment.

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The term applied overhead refers to the indirect costs that are allocated to a product or service using a predetermined rate or formula. It includes indirect materials, indirect labor, and other indirect costs such as rent, utilities, and depreciation. Direct labor hours or cost are used to calculate direct labor costs, which are a separate element of product cost.

The Term Applied Overhead Refers to the Element of Direct