A zero balance in the manufacturing overhead account prior to adjusting the Manufacturing Overhead account indicates that actual overhead and applied overhead cost are equal, so that all inventory is reflected at actual cost.

Question

Quizplus · Accepted Answer

A zero balance in the manufacturing overhead account means that the actual overhead and applied overhead costs are equal. This indicates that all inventory is reflected at actual cost, which is true.

A Zero Balance in the Manufacturing Overhead Account Prior to Adjusting