Asked by
Tsega Worku
on Oct 15, 2024
Verified
If a company applies overhead to production with a predetermined overhead rate,a credit balance in the Factory Overhead account at the end of the period means that:
A) The bookkeeper has made an error because the debits don't equal the credits.
B) The balance will be carried forward to the next period as an overhead cost.
C) Actual overhead incurred was less than the overhead amount applied to production.
D) The overhead was underapplied for the period.
E) Actual overhead was greater than the overhead amount applied to production.
Predetermined Overhead Rate
A rate used to allocate manufacturing overhead costs to products, estimated before the costs are incurred.
Factory Overhead
The total of all the indirect costs associated with manufacturing, not including direct labor or direct materials.
Applied to Production
Pertaining to costs or accounting methodologies directly associated with the manufacturing or creation process of goods or services.
- Familiarize oneself with the method of overhead allocation within job order costing frameworks.
Verified Answer
BC
Learning Objectives
- Familiarize oneself with the method of overhead allocation within job order costing frameworks.