At the end of a fiscal year, overapplied factory overhead should be:

Question

Quizplus · Accepted Answer

Overapplied factory overhead means that more overhead has been allocated to products than was actually incurred during the period. This would result in an overstated cost of goods sold (COGS). To adjust for this, the overapplied amount should be credited to COGS, which would decrease the reported COGS and increase net income. Therefore, option B is the best choice.

At the End of a Fiscal Year, Overapplied Factory Overhead