If manufacturing overhead is underapplied, then: A. actual manufacturing overhead cost is less than estimated manufacturing overhead cost. B. the amount of manufacturing overhead cost applied to Work in Process is less than the actual manufacturing overhead cost incurred. C. the predetermined overhead rate is too high. D. the Manufacturing Overhead account will have a credit balance at the end of the year.

Question

17-09-2020
Business

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If manufacturing overhead is underapplied, then: A. actual manufacturing overhead cost is less than estimated manufacturing overhead cost. B. the amount of manufacturing overhead cost applied to Work in Process is less than the actual manufacturing overhead cost incurred. C. the predetermined overhead rate is too high. D. the Manufacturing Overhead account will have a credit balance at the end of the year.

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andromache andromache · Answer 1 · 2020-09-18T02:54:34+02:00

Answer:

B. the amount of manufacturing overhead cost applied to Work in Process is less than the actual manufacturing overhead cost incurred.

Explanation:

As we know that manufacturing overhead is an indirect expense in which all the indirect cost are recorded

In the case of the underapplied manufacturing overhead, the cost of manfacturing overhead cost that applied to Work in process is lesser than the actual cost spent

Therefore in the given case, the option B is correct