In the cost of goods sold calculation, overapplied manufacturing overhead is usually:

Question

Quizplus · Accepted Answer

Overapplied manufacturing overhead occurs when the actual overhead cost is less than the applied overhead cost. This means that the cost of goods sold has been overstated, so the overapplied amount is subtracted from the unadjusted cost of goods sold to arrive at the adjusted cost of goods sold. Therefore, it is subtracted from unadjusted cost of goods sold.

In the Cost of Goods Sold Calculation, Overapplied Manufacturing Overhead