Manufacturing overhead costs allocated to a job amounted to $492,000. The actual manufacturing costs incurred during the year was $500,000. Overhead costs have been underallocated.

Question

Quizplus · Accepted Answer

Since the allocated manufacturing overhead costs are less than the actual manufacturing costs incurred, it indicates that overhead costs have been underallocated.

Manufacturing Overhead Costs Allocated to a Job Amounted to $492,000