Which of the following statements is true assuming the manufacturing overhead account is underapplied?
A) The predetermined overhead rate is too high.
B) The amount of costs in work in process is more than actual production costs.
C) Cost of goods sold will be debited at the end of the period when the manufacturing overhead account is adjusted.
D) The manufacturing overhead applied must be less than the manufacturing overhead estimated.

Question

Quizplus · Accepted Answer

When the manufacturing overhead account is underapplied, it means that the actual overhead costs were higher than the overhead costs applied to products. To adjust for this at the end of the period, the Cost of Goods Sold (COGS) account is debited to reflect the additional overhead costs that were not initially applied, thereby increasing the COGS.

Which of the Following Statements Is True Assuming the Manufacturing