Cost of goods sold needs to be increased at year-end when the manufacturing overhead is overapplied.

Name: Cost of goods sold needs to be increased at year-end when the manufacturing overhead is overapplied.
Brand: Quizplus
Rating: 4.9 (51 reviews)

Question

Quizplus · Accepted Answer

When manufacturing overhead is overapplied, it means that the actual overhead costs were less than what was allocated. Therefore, the cost of goods sold would be decreased, not increased, to adjust for the overallocation.

Cost of Goods Sold Needs to Be Increased at Year-End