At the end of the year, overhead applied was $35,000,000. Actual overhead was $34,300,000. Closing over/under applied overhead into cost of goods sold would cause net income to:

Question

Quizplus · Accepted Answer

The overhead applied was more than the actual overhead by $700,000, indicating over-applied overhead. Closing this into cost of goods sold would decrease the cost of goods sold, thus increasing net income by $700,000.

At the End of the Year, Overhead Applied Was $35,000,000