If a Company Applies Overhead to Production with a Predetermined

question 14

Multiple Choice

If a company applies overhead to production with a predetermined rate, a credit balance in the Factory Overhead account at the end of the period means that:

• A) The bookkeeper has made an error because the debits don't equal the credits.
• B) The balance will be carried forward to the next period as an overhead cost.
• C) Actual overhead incurred was less than the overhead amount charged to production.
• D) The overhead was underapplied for the period.
• E) Actual overhead was greater than the overhead amount charged to production.

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Definitions:

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