Sorry to say that you might have rather confused the answer-seeker.
Those FOH which actually occur at the end of the year. (Asal kharchay jo ho gae hain)
Those FOH which are obtained by multiplying FOH rate (which we estimate at the start of the year) with the actual capacity. This will tell how much factory overheads were to be expensed on the basis of actual capacity or production.
(Actual production ya capacity ki base par kharchay honey kitne chahiye thay)
Actual FOH - Appllied FOH = (Over) / under applied
Means ya actual se ziada kharcha kr dia ya efficiency ki waja se kum mei hi saara kaam ho gya.
Thest are the estimated cost at the start of the year.
Means k Accountant estimate krta ha k iss saal mei kitne kharche ho sakte hain i.e., according to previous history of the company and the effect of inflation.
Hope it answers the question easily.
Lecturer and Subject Specialist - Accounting, Auditing and I.T auditing.
CA, MBA (F), CIA, mySAP, CISA.