if a company applies overead to jobs on the basis of a predetermined overhead ra
ID: 2402591 • Letter: I
Question
if a company applies overead to jobs on the basis of a predetermined overhead rate, which of the following is true if the manufacturing overhead account at the end of any period has a debit balance?
a) more overhead cost has been charged to jobs than has been incurred during the period.
b) more overhead cost has been incurred during the period than has been charged tp jobs.
c) the amount of overhead cost charged to jobs is greater than the estimated cost for the period.
d) the amount of overhead cost charged to jobs is less than the estimated overhead cost for the period.
Explanation / Answer
Correct answer is option B.more overhead cost has been incurred during the period than has been charged to jobs.
When there is DEBIT balance in the Manufacturing overhaed it denotes that the applied or charged overhead to job is less than actually incurred.
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