When applied overhead exceeds actual overhead cost,
A)over-applied(absorbed) overhead is added to cost of goods sold.
B)overapplied overhead is deducted from cost of goods sold.
C)underapplied overhead is added to cost of goods sold.
D)underapplied overhead is deducted from cost of goods sold.

Question

Quizplus · Accepted Answer

When applied overhead exceeds actual overhead costs, it means that overhead has been overapplied. In such cases, the overapplied overhead is deducted from the cost of goods sold to correct the overestimation.

When Applied Overhead Exceeds Actual Overhead Cost