In computing its predetermined overhead rate,Marple Company inadvertently left its indirect labor costs out of the computation.This oversight will cause:
A)Manufacturing Overhead to be overapplied.
B)The Cost of Goods Manufactured to be understated.
C)The debits to the Manufacturing Overhead account to be understated.
D)The ending balance in Work in Process to be overstated.

Question

Quizplus · Accepted Answer

Leaving out indirect labor costs will result in a lower predetermined overhead rate, causing the Cost of Goods Manufactured to be understated as not all overhead costs are allocated to products.

In Computing Its Predetermined Overhead Rate,Marple Company Inadvertently Left Its