Before any journal entries are made to deal with underapplied overhead, the total cost of jobs is:

Question

Quizplus · Accepted Answer

Underapplied overhead means that the actual overhead incurred is more than the overhead allocated to jobs based on the predetermined overhead rate. If underapplied overhead is not adjusted, then the total cost of jobs will be understated because the actual overhead incurred has not been allocated to the jobs it was used for.

Before Any Journal Entries Are Made to Deal with Underapplied