If the manufacturing overhead account has a credit balance, then
A) manufacturing overhead is overapplied.
B) manufacturing overhead is underapplied.
C) cost of goods sold is understated.
D) manufacturing overhead is underapplied AND cost of goods sold is understated.

Question

Quizplus · Accepted Answer

A credit balance in the manufacturing overhead account indicates that more overhead costs were charged to production than were actually incurred, resulting in an overapplication of overhead.

If the Manufacturing Overhead Account Has a Credit Balance, Then