Actual overhead exceeds applied overhead and the amount is immaterial.Which of the following will be true? Upon closing, Overhead is Cost of Goods Sold will A)underapplied increase B)overapplied decrease C)overapplied increase D)underapplied decrease

Question

Quizplus · Accepted Answer

When actual overhead exceeds applied overhead, it means overhead is underapplied. This results in an increase in the Cost of Goods Sold (COGS) because the additional overhead costs need to be accounted for, typically by adjusting COGS upwards.

Actual Overhead Exceeds Applied Overhead and the Amount Is Immaterial