Overapplied Overhead Is the Amount by Which Overhead Applied to Jobs

question 117

True/False

Overapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead allocation rate exceeds the overhead incurred during a period.

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Definitions:

Direct Labor Hours

The total number of hours worked by employees directly involved in the manufacturing process, used as a measure for assigning labor costs to produced goods.

Completed Unit

A unit of product that has completed the manufacturing process and is considered ready for sale or delivery to the customer.

Actual Rate

The real interest rate or exchange rate that is applied in current transactions, distinct from theoretical or future rates.

Standard Rate

A predetermined cost or price used in budgeting and costing exercises, reflecting an expected or agreed level of expenditure or charge.