If overhead applied is less than actual overhead incurred, it is:
A) Underapplied.
B) Expected.
C) Overapplied.
D) Normal.
E) Fully applied.

Question

Quizplus · Accepted Answer

If overhead applied is less than actual overhead incurred, it means that the predetermined overhead rate was set too low and the actual overhead was higher than what was anticipated. This results in underapplied overhead because there are not enough overhead costs applied to the products.

If Overhead Applied Is Less Than Actual Overhead Incurred, It