The amount of overallocation or underallocation is found by taking the difference between the amount of overhead allocated during the year and the amount of overhead incurred during the year.

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Quizplus · Accepted Answer

This is true. Overallocation or underallocation is found by comparing the amount of overhead allocated to a particular cost object (such as a product or department) with the actual amount of overhead incurred during the year. The difference between these two amounts can indicate whether too much or too little overhead was assigned to the cost object in question.

The Amount of Overallocation or Underallocation Is Found by Taking