The amount by which overhead incurred during a period exceeds the overhead applied to jobs is:
A) Underapplied overhead.
B) Actual overhead.
C) Predetermined overhead.
D) Overapplied overhead.
E) Balanced overhead.

Question

Quizplus · Accepted Answer

Underapplied overhead occurs when the actual overhead incurred is greater than the overhead applied to jobs. This can happen if the predetermined overhead rate used to allocate overhead to jobs was too low or if there were unanticipated increases in overhead costs.

The Amount by Which Overhead Incurred During a Period Exceeds