Applied Overhead Calculator

Formula

The formula to calculate the applied overhead is:

\[ \text{AO} = R \times T \]

Where:

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

Let's say the allocation rate is $50 per hour and the total time of production is 100 hours. Using the formula:

\[ \text{AO} = 50 \times 100 = 5000 \, \text{\$} \]

So, the applied overhead is $5000.