Overapplied overhead will always result when a predetermined factory overhead rate is employed and:
A)Overhead incurred is more than overhead applied.
B)Overhead incurred is less than overhead applied.
C)Production is greater than sales.
D)Actual overhead costs are more than expected.

Question

Quizplus · Accepted Answer

Overapplied overhead occurs when the actual overhead costs incurred are less than the overhead applied using the predetermined rate. This means that the applied overhead is more than what was actually incurred, resulting in an overapplied amount.

Overapplied Overhead Will Always Result When a Predetermined Factory Overhead