Asked by Gaoussou Doucoure on Jul 11, 2024
Verified
If a company applies overhead to jobs on the basis of a predetermined overhead rate, a credit balance in the Manufacturing Overhead account at the end of any period means that:
A) the amount of overhead cost charged to jobs is less than the estimated overhead cost for the period.
B) more overhead cost has been charged to jobs than has been incurred during the period.
C) the amount of overhead cost charged to jobs is greater than the estimated cost for the period.
D) more overhead cost has been incurred during the period than has been charged to jobs.
Predetermined Overhead Rate
A rate used to allocate manufacturing overhead to individual products or job orders, calculated before the period begins based on estimated costs and activity levels.
Manufacturing Overhead
Indirect costs related to the production process, such as factory rent, utilities, and maintenance, which are not directly tied to specific units produced.
- Determine and compute whether manufacturing overhead is underapplied or overapplied, and understand the consequences.
Verified Answer
Learning Objectives
- Determine and compute whether manufacturing overhead is underapplied or overapplied, and understand the consequences.
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