At the end of the year the accountant records the amount of the overapplied overhead as a decrease to Cost of Goods Sold.

Name: At the end of the year the accountant records the amount of the overapplied overhead as a decrease to Cost of Goods Sold.
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Question

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If overhead is overapplied, it means that more overhead was allocated to products than was actually incurred. To correct this, the excess amount is subtracted from Cost of Goods Sold.

At the End of the Year the Accountant Records the Amount