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A company assigned overhead to work in process. At year end what does the amount of overapplied overhead mean?
A) The overhead assigned to work in process is greater than the estimated overhead costs.
B) The overhead assigned to work in process is less than the estimated overhead costs.
C) The overhead assigned to work in process is less than the actual overhead.
D) The overhead assigned to work in process is greater than the overhead incurred.
Overapplied Overhead
A situation where the allocated or estimated manufacturing overhead costs exceed the actual overhead costs incurred.
Work in Process
Refers to the total cost of unfinished goods in the manufacturing process at any given time.
Estimated Overhead Costs
The anticipated costs for overhead activities in a business, including utilities, rent, and management salaries, not directly tied to product production.
- Learn about the intricacies of applied, actual, overapplied, and underapplied manufacturing overhead.
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Learning Objectives
- Learn about the intricacies of applied, actual, overapplied, and underapplied manufacturing overhead.
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