Spencer Company Had Overapplied Factory Overhead of $5,000 Last Year

question 47

Multiple Choice

Spencer Company had overapplied factory overhead of $5,000 last year.Which of the following statements is not true?

• A)A higher level of production may have been achieved than budgeted for.
• B)The Work in Process account was overcharged for the costs of factory overhead incurred during the period.
• C)The actual factory overhead expenses may have been less than budgeted for the operating level achieved.
• D)Assuming the amount is not material enough to distort net income,Cost of Goods Sold should be increased by this amount.

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Definitions:

Formal Governance Structures

The officially recognized systems, rules, and practices that direct and control an organization, ensuring accountability, fairness, and transparency.

Significant Ambiguity

Significant ambiguity denotes a situation or information that is open to multiple interpretations or lacks clarity, often leading to uncertainty or misunderstanding.

Mom-And-Pop Operations

Small, family-owned or independent businesses, often characterized by personal customer service and local operation.

Dimensions

Dimensions represent measurable extents of an object or system, such as length, width, height, or depth, in physical spaces, or could refer to aspects or elements in other contexts.