Use the following information to answer questions
Bow Wow Corp. uses a standard cost system to compute product costs. Standard costs are as follow:

During April, Bow Wow produced 200,000 units.
-During April, Bow Wow Corporation incurred $104,000 of overhead cost. At the end of April, Bow Wow

Question

Use the following information to answer questions 
Bow Wow Corp. uses a standard cost system to compute product costs. Standard costs are as follow:
  
During April, Bow Wow produced 200,000 units.
-During April, Bow Wow Corporation incurred $104,000 of overhead cost. At the end of April, Bow Wow

Quizplus · Accepted Answer

Underapplied overhead occurs when the actual overhead costs are greater than the overhead costs applied to products or services. Since Bow Wow Corporation incurred $104,000 of overhead cost and there's mention of a $4,000 discrepancy without specifying the direction of application (whether they applied more or less), the most logical conclusion is that they did not apply enough overhead to their products or services, resulting in $4,000 of underapplied overhead.

Use the Following Information to Answer Questions