Spencer Company Had Overapplied Factory Overhead of $5,000 Last Year

question 47

Multiple Choice

Spencer Company had overapplied factory overhead of $5,000 last year.Which of the following statements is not true?

• A)A higher level of production may have been achieved than budgeted for.
• B)The Work in Process account was overcharged for the costs of factory overhead incurred during the period.
• C)The actual factory overhead expenses may have been less than budgeted for the operating level achieved.
• D)Assuming the amount is not material enough to distort net income,Cost of Goods Sold should be increased by this amount.

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Definitions:

Intangible Asset

An asset that lacks physical substance and is not financial in nature, which is identifiable and provides economic benefits or advantages to the owner.

Trademark

A symbol, word, or phrase legally registered or established by use as representing a company or product.

Amortized

The process of gradually reducing the cost of an intangible asset or paying off a debt over a period.

Legal Fees

Charges for legal services provided by attorneys or law firms.