What does overapplied manufacturing overhead mean?

A. The applied manufacturing overhead cost was greater than the actual manufacturing overhead cost.

B. The estimated manufacturing overhead cost was less than the applied manufactuing overhead cost.

C. The applied manufactuing overhead cost was less than the actual maufacturing overhead cost.

D. The estimated manufactuing overhead cost was less than the actual manufacturing overhead cost.

Question

Jakob Whitney

Business

2 February, 07:12

What does overapplied manufacturing overhead mean?

A. The applied manufacturing overhead cost was greater than the actual manufacturing overhead cost.

B. The estimated manufacturing overhead cost was less than the applied manufactuing overhead cost.

C. The applied manufactuing overhead cost was less than the actual maufacturing overhead cost.

D. The estimated manufactuing overhead cost was less than the actual manufacturing overhead cost.

+2

Answers (2)

Know the Answer?

Darren Harrell · Answer 1

The correct answer is letter "A": The applied manufacturing overhead cost was greater than the actual manufacturing overhead cost.

Explanation:

During the process of manufacturing, in case the applied overhead costs are higher than the actual overhead necessary for production, the result will be an over-applied cost of manufacturing overhead. When the applied overhead is lower than the actual overhead then the result will be an under-applied cost of manufacturing overhead.

Glenn Rhodes · Answer 2

A. The applied manufacturing overhead cost was greater than the actual manufacturing overhead cost.

Explanation:

Applied manufacturing overhead is calculated by using multiplying predetermined manufacturing overhead rate with Actual units of basis used to determined manufacturing overhead rate e. g Machine hours, labor hours etc. If manufacturing overhead applied is greater than the actual manufacturing overhead incurred during the period then overhead is overapplied.