How is the use of a predetermined rate for overhead results in an over or under applied balance at the end of the period.

How is the use of a predetermined rate for overhead results in an over or under applied balance at the end of the period. Your answer may be in bullet points or sentences and must include the words costs, actual, and applied.

• I have read over the chapters, used the formula and see the outcome but can't figure out exactly why there is always an over or under balance. I know it helps to assist in closing books faster because it doesn't take as many steps.