When Actual Overhead Cost Exceeds Overhead Applied to Production

question 46

Multiple Choice

When actual overhead cost exceeds overhead applied to production,

• A)over-absorbed overhead is added to cost of goods sold.
• B)over-absorbed overhead is deducted from cost of goods sold.
• C)under-absorbed overhead is added to cost of goods sold.
• D)under-absorbed overhead is deducted from cost of goods sold.

Explore firm-level decision-making in response to quantity discounts and the implication for profit maximization.

Examine the effect of government actions on market prices and equilibrium.

Comprehend the relationship between production functions, input costs, and industry supply curves in the short and long run.

Develop insights into cost structures of farming practices and their impact on production costs and pricing.

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Definitions:

Work Sheet

A document used by accountants to prepare adjusting entries and to draft a company's financial statements.

Accounting Cycle

The accounting cycle is a step-by-step process of recording, classifying, and summarizing financial transactions of a business to provide an accurate picture of its financial position and performance.

Adjusting Entries

Documentation in accounting made at the termination of an accounting cycle to allot income and spending to the span in which they factually occurred.

Debit Total

The sum of all debit entries made in an account or ledger over a specific period.