At the End of the Year,overhead Applied Was $35,000,000

question 8

Multiple Choice

At the end of the year,overhead applied was $35,000,000.Actual overhead was $35,800,000.Closing over/under applied overhead into cost of goods sold would cause net income to

• A)increase by $800,000.
• B)decrease by $800,000.
• C)stay the same.
• D)decrease by $200,000.

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Definitions:

Batches

Batches refer to a specific quantity of material or products processed or produced at one time in a manufacturing or production process.

Activity Rates

Ratios used to allocate costs to products or services based on the amount of activity consumed by each.

Activity-Based Costing

A pricing technique that allocates expenses to goods or services according to the tasks and materials involved in their creation.

Activity Cost Pools

A costing method that groups all the costs associated with a specific activity, allowing more accurate allocation of costs to products or services.