If the overhead control account has a credit balance at the end of the period,
A) overhead is overapplied and the difference should be credited to the proper accounts.
B) overhead is overapplied and the difference should be debited to the proper accounts.
C) overhead is underapplied and the difference should be debited to the proper accounts.
D) overhead is underapplied and the difference should be credited to the proper accounts.

Question

Quizplus · Accepted Answer

A credit balance in the overhead control account indicates that overhead has been overapplied, meaning more overhead was applied to production than was actually incurred. The difference should be credited to the proper accounts to adjust for this overapplication.

If the Overhead Control Account Has a Credit Balance at the End