Enter the average overhead allocation rate and the total number of hours into the calculator to determine the applied overhead.

- Manufacturing Overhead Calculator
- Predetermined Overhead Rate Calculator
- Capacity Utilization Calculator
- Total Manufacturing Cost Calculator

## Applied Overhead Formula

The following formula is used to calculate an applied overhead.

AO = R * T

- Where AO is the applied overhead ($)
- R is the allocation rate ($/hr)
- T is the total time of production (hr)

## Applied Overhead Definition

Applied overhead is a measure of the total cost of labor and overhead when a labor rate is applied to a total time of production.

## Applied Overhead Example

How to calculate applied overhead?

**First, determine the allocation rate.**Calculate the allocation rate of the labor.

**Next, determine the total time.**Measure the total production time in hours.

**Finally, calculate the applied overhead.**Calculate the applied overhead using the formula above.

## FAQ

**What is applied overhead?**

Applied overhead is a measure of the total cost of labor/overhead when a rate is applied to a certain task. In other words, it’s simply the overhead when looking at an activity level.