Manufacturing
Applying Manufacturing Overhead (Applied)
Allocating estimated indirect costs to products based on a predetermined rate (e.g., $5 per machine hour).
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Work-in-Process (WIP) Inventory | Asset (+) | 1,200.00 | - |
| Manufacturing Overhead (Applied) | Contra-Expense (+) | - | 1,200.00 |
💡 Accountant's Note
This is a core CMA concept. Since actual overhead isn't known until the bills arrive, we use an 'Applied' rate to cost products in real-time.
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