Testor Products uses a job-order costing system with a predetermined overhead rate based on machine-hours. The company closes out any underapplied or overapplied overhead to Cost of Goods Sold.Required:If overhead is overapplied, what adjustment does the company make to Cost of Goods Sold? Is Cost of Goods Sold increased or decreased? Why?

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The Answer of Testor Products uses a job-order costing system with a predetermined overhead rate based on machine-hours. The company closes out any underapplied or overapplied overhead to Cost of Goods Sold.Required:If overhead is overapplied, what adjustment does the company make to Cost of Goods Sold? Is Cost of Goods Sold increased or decreased? Why?

Testor Products Uses a Job-Order Costing System with a Predetermined