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APPLICATION RATE, OVERHEAD is a rate used to apply manufacturing overhead to output; estimated factory overhead for a period divided by the estimated application base.
CASH SHORT/OVER ACCOUNT, in retail sales, is where any differences between the cash register tape totals and the actual cash receipts is charged against the cash short and over account. If the ending balance of the account is a debit it is shown on the Income Statement as a miscellaneous expense. If the ending balance of the account is a credit it is shown on the Income Statement as Other Revenue.
STEPPED COSTS is a cost that increases by a reasonably constant sum each time volume or activity increases by a predictable, constant, multiple. The smallest step costs are variable costs, which increase by a discrete amount each time output or activity increases by one unit. Larger steps will consist of what are, effectively, fixed costs over a particular range of output. Some costs increase, or decrease, in significant steps when output or activity passes certain limits. For instance, if a bus company regularly has more passengers on a route than can be carried by a single vehicle it may be necessary to use an additional bus. Running an additional bus will double the cost of operating on that route. Similarly, a manufacturing firm may have a policy of employing one supervisor for every ten production workers. In which case the firm will need one supervisor for 1-10 employees, two supervisors for 11-20 employees, and so on. So, if demand rises to the point where 21 production employees are required an extra supervisor must be employed. Costs that behave in this way are called stepped costs.
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