Applied overhead is $82,100 and actual overhead is $79,650. What overhead position exists?
Correct Answer
C) $2,450 overapplied
Applied overhead exceeds actual overhead by $2,450, so overhead is overapplied.
Why This Is the Correct Answer
Applied overhead exceeds actual overhead by $2,450, so overhead is overapplied.
Why the Other Options Are Wrong
Option A: $2,450 underapplied
$2,450 underapplied is not aligned with the supported result for overapplied overhead; it has the wrong label or classification even if the number looks close.
Option B: $2,650 underapplied
$2,650 underapplied is above the supported result for overapplied overhead; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $161,750 overapplied
$161,750 overapplied is above the supported result for overapplied overhead; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
the controlling choice Overhead drawer for Office Compares: label applied before counting dollars.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section Two, Accounting for Costs and Expenses, Accounting for Overhead; use the job ledger figures in the stem and recompute the same accounting measure.
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