Assume That Variable Overhead Is Overapplied by $200 and Fixed

question 56

Multiple Choice

Assume that variable overhead is overapplied by $200 and fixed overhead is underapplied by $100. If these variances are considered immaterial, the effect on cost of goods sold is:

• A) $300 increase
• B) $100 increase
• C) $300 decrease
• D) $100 decrease

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Definitions:

Reconcile

The act of making one account consistent with another, typically by explaining differences and adjusting financial records as necessary.

Unwritten

Pertaining to norms, rules, or agreements that are understood and followed but not formally documented.

Behavior

The actions, reactions, or conduct of an individual or group in response to external or internal stimuli.

Informal

Characterized by a casual or unofficial form, manner, or nature, often contrasting with formal structures or protocols.