Overapplied Overhead Means That Not Enough Overhead Cost Was Charged

question 176

True/False

Overapplied overhead means that not enough overhead cost was charged to products as they were made.

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Definitions:

Return on Investment

A performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments, calculated as net profit divided by the cost of the investment.

Gross Margin

The difference between revenue and cost of goods sold, divided by revenue, expressed as a percentage.

Average Operating Assets

The average value of a company's assets used in its operating activities over a certain period.

Net Operating Income

A company's revenue minus its operating expenses, not including taxes and interest, showing the profitability from regular business operations.