1. The amount by which an overhead has been over absorbed. Added to budgeted profit in end of period accounts. 2. When the overhead applied to a work in progress is more than the work in progress will incur, it is said to be overapplied. This is reported in balance sheets as unearned revenue , and is balanced in the end of year accounts by adding a credit to the Cost of Goods Sold column.
Black’s Law Online Dictionary
