The use of predetermined overhead rates to allocate factory overhead, which includes both fixed and variable expenses, results in stable charge during the year to each unit of product for this particular of cost. Because the departmental expense budgets show planned costs as they are expected to accrue, while the application of overhead through the rates will track the seasonal pattern of planned production, a budget over/under applied factory overhead for interim periods must be planned during the year. This effect is shown in Schedule 37, “Budget Overhead Over/Under Applied.” Notice, however, that at year-end the total overhead planned and the total overhead applied are equal.