A more thorough explanation:

Applied cost refers to a cost that is allocated or assigned to a project before it is actually incurred. This means that the cost is estimated and included in the budget for the project. For example, if a construction company is building a new house, they may include the cost of materials and labor in the budget before they actually purchase the materials or hire the workers.

Another example of applied cost is in manufacturing. A company may estimate the cost of producing a certain number of units of a product, including the cost of raw materials, labor, and overhead, before they actually start production.

Overall, applied cost is a way for companies to plan and budget for projects or production processes before they actually happen. It helps them to estimate the total cost of a project and make sure they have enough resources to complete it.