If actual overhead is less than applied overhead, which of the following will be true? Upon closing,
A) underapplied credited
B) underapplied debited
C) overapplied debited
D) overapplied credited

Question

If actual overhead is less than applied overhead, which of the following will be true? Upon closing, 
A) underapplied credited 
B) underapplied debited 
C) overapplied debited 
D) overapplied credited

Quizplus · Accepted Answer

If actual overhead is less than applied overhead, it means that the overhead was overapplied. Therefore, the overapplied amount needs to be credited back to the manufacturing overhead account. Therefore, option D, overapplied credited is the correct choice.

If Actual Overhead Is Less Than Applied Overhead, Which of the Following