When You Subtract Cost of Revenues from Revenues Obtained by Selling

question 39

Multiple Choice

When you subtract cost of revenues from revenues obtained by selling the firm's products,you obtain ________.

• A) net income
• B) gross profit
• C) accounts payable
• D) interest expense

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Definitions:

Overapplied Overhead

A situation where the allocated manufacturing overhead costs are more than the actual overhead costs incurred.

Overhead Incurred

The actual indirect costs experienced by a company during production, including utilities, rent, and salaries of employees not directly involved in production.

Overhead Applied

The allocation of overhead costs to goods produced based on a predetermined rate.

Overhead Incurred

Overhead incurred refers to the total costs associated with running a business that are not directly tied to a specific product or service.