Overapplied manufacturing overhead occurs when:
A)applied overhead exceeds actual overhead.
B)applied overhead exceeds estimated overhead.
C)actual overhead exceeds estimated overhead.
D)budgeted overhead exceeds actual overhead.

Question

Quizplus · Accepted Answer

Overapplied manufacturing overhead occurs when the amount of manufacturing overhead applied to work in process exceeds the actual amount of manufacturing overhead costs incurred during a period. This can happen when estimated overhead is overallocated or when actual overhead costs are less than estimated. Therefore, option A is the correct answer.

Overapplied Manufacturing Overhead Occurs When