The ________ Account Is Credited to Adjust for Overallocated Overhead

question 139

Multiple Choice

The ________ account is credited to adjust for overallocated overhead costs.

• A) Cost of Goods Sold
• B) Sales Revenue
• C) Manufacturing Overhead
• D) Finished Goods Inventory

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Definitions:

Budget Variance

The difference between what was budgeted for and what was actually spent or received.

Volume Variance

The difference between the planned level of production volume and the actual production volume, often relating to overhead costs.

Predetermined Overhead Rate

The rate used to assign overhead costs to products or services based on a predetermined formula.

Fixed Component

The portion of total costs that remains constant, regardless of changes in activity level.