Scooby Company Has Applied $567,988 of Overhead into Production on Jobs

question 83

Multiple Choice

Scooby Company has applied $567,988 of overhead into production on Jobs in the Work in Process account. Actual overhead at the end of the year is $575,000. What is the adjustment for over or underapplied overhead?

• A) $7012 Overapplied, increase Cost of Goods Sold
• B) $7012 Underapplied, increase Cost of Goods Sold
• C) $7012 Overapplied, decrease Cost of Goods Sold
• D) $7012 Underapplied, decrease Cost of Goods Sold

---

Definitions:

Long-Run Aggregate Supply Curve

A graphical representation that shows the relationship between the overall price level and the quantity of goods and services produced by an economy when all resources are fully employed.

Cyclical Unemployment

The variation in unemployment caused by the ups and downs of economic cycles, including recessions and expansions.

Recessionary Gap

A situation where an economy's actual production is less than its potential output, often leading to unemployment and underused resources.

Potential Output

The level of productivity an economy can achieve with full employment and resources utilization, without causing inflation.