Applied overhead refers to the indirect costs incurred during the construction process that are allocated to specific projects based on predetermined rates. These costs may include items such as equipment depreciation, utilities, insurance, and general administrative expenses. By applying overhead to individual projects, construction companies can more accurately track the true cost of each job and make informed decisions about pricing, resource allocation, and project profitability.The process of applying overhead involves calculating a predetermined overhead rate based on expected costs and then allocating this rate to each project based on a relevant cost driver, such as labor hours or materials used. This allows construction companies to account for indirect costs in a systematic and consistent manner, ensuring that all expenses are properly attributed to the projects that incurred them. By accurately applying overhead, construction companies