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Compute applied overhead and the under-applied amount for the year

  • For Accountants
  • You practice Catching mistakes and made-up facts
  • Time about 5 minutes
  • Level Intermediate

About this exercise

You're closing the year for a small manufacturer. Write a prompt for plain text with lines starting "Overhead rate:", "Applied overhead:", "Actual overhead:", "Difference:" and "Job 214:". Use the rate set in January for the whole year. Say whether the difference is under-applied or over-applied. Show the math. Under 80 words.

Common mistakes when you ask AI for this

  • Using the revised hours. The AI recalculates the rate with 7,600 hours. Try: Say: "Use the January rate all year."
  • Using budgeted hours for applied overhead. The AI applies 8,000 hours. Try: Add: "Applied = actual hours x the rate."
  • Missing under or over. The AI gives the difference without a label. Try: Add: "Say under-applied or over-applied."
  • Markdown extras. The AI adds bold labels, headings and a closing note. Try: Say: "Plain text, no bold. Output only the lines asked for."
  • Trusting the AI to count words. AI is bad at counting and runs past word limits. Try: Ask for fewer words than the real cap and keep each part short.

What a strong prompt includes

  • Names the five lines
  • Uses the January rate
  • Applies actual hours
  • Asks under or over
  • Caps length

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