If Overhead Is Miscalculated So That It Is Underabsorbed,the Result

question 33

Multiple Choice

If overhead is miscalculated so that it is underabsorbed,the result if the error is not corrected will be that

• A)Inventory will be understated and net income will be overstated.
• B)Inventory and net income will be overstated.
• C)Inventory will be overstated and net income will be understated.
• D)Inventory and net income will be understated.

---

Definitions:

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Expenditure

The total amount of money spent by an individual, firm, or government on goods and services.

Innovation

The process of creating new methods, products, or ideas that bring about significant improvements or changes.

Diffusion

The process by which a new idea, product, or practice spreads through a population or society.