COST ACCOUNTING
MANUFACTURING OVERHEAD
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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when applied manufacturing overhead cost is more than budgeted manufacturing overhead cost
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when applied manufacturing overhead cost is more than actual manufacturing overhead cost
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when applied manufacturing overhead cost is less than budgeted manufacturing overhead cost
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when applied manufacturing overhead cost is less than actual manufacturing overhead cost
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Detailed explanation-1: -Answer: A. The applied manufacturing overhead cost was greater than the actual manufacturing overhead cost. In case the applied manufacturing overhead is higher than the actual amount of manufacturing overhead incurred, the difference will be termed as the overapplied manufacturing overhead.
Detailed explanation-2: -Over applied Overhead. Overhead that occurs when the applied overhead is greater than the actual overhead. Overhead Variance. Difference between applied overhead and actual overhead.
Detailed explanation-3: -Answer and Explanation: If overhead applied is less than actual overhead incurred, it is: b. Underapplied. If actual overhead incurred during an accounting period is greater than the amount of overhead applied to a job, this means overhead was underapplied to that particular job.
Detailed explanation-4: -If manufacturing overhead applied exceeds the actual manufacturing overhead costs of the period, then manufacturing overhead is overapplied.
Detailed explanation-5: -If manufacturing overhead has a debit balance, the overhead is underapplied, and the resulting amount in cost of goods sold is understated. The adjusting entry is: If manufacturing overhead has a credit balance, the overhead is overapplied, and the resulting amount in cost of goods sold is overstated.