If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a
A) debit balance and be underapplied
B) credit balance and be underapplied
C) credit balance and be overapplied
D) debit balance and be overapplied

Question

Quizplus · Accepted Answer

If the amount of factory overhead cost incurred exceeds the amount applied, it means the actual overhead cost is more than what was estimated. This will result in a debit balance in the factory overhead account, indicating that there is an underapplied manufacturing overhead cost.

If the Amount of Factory Overhead Cost Incurred Exceeds the Amount