Underapplied overhead occurs when the balance in the Manufacturing Overhead Control account is:
A) greater than the balance in the Applied Manufacturing Overhead account.
B) equal to the balance in the Applied Manufacturing Overhead account.
C) less than the balance in the Applied Manufacturing Overhead account.
D) less than the balance in the Finished Goods Inventory account.

Question

Quizplus · Accepted Answer

Underapplied overhead occurs when the actual manufacturing overhead costs (recorded in the Manufacturing Overhead Control account) are greater than the overhead costs applied to production (recorded in the Applied Manufacturing Overhead account).

Underapplied Overhead Occurs When the Balance in the Manufacturing Overhead