Applied overhead of a company exceeds actual overhead when the
A)Overhead account has a credit balance.
B)journal entry to account for the difference involves a debit to Cost of Goods Sold.
C)Overhead account has a debit balance.
D)company has overspent in the overhead cost area.

Question

Quizplus · Accepted Answer

If the Overhead account has a credit balance, it means that the applied overhead is greater than the actual overhead. This happens when the company overestimates its overhead costs or when the actual overhead is lower than expected.

Applied Overhead of a Company Exceeds Actual Overhead When the