If manufacturing overhead has been overallocated during the year, it means the jobs have been overcosted.

Question

Quizplus · Accepted Answer

Manufacturing overhead is allocated to jobs based on a predetermined overhead rate. If the actual overhead costs incurred are less than the allocated amount, then manufacturing overhead has been overallocated. This means that the jobs have been assigned more overhead costs than they actually incurred, resulting in them being overcosted.

If Manufacturing Overhead Has Been Overallocated During the Year, It