Underallocated manufacturing overhead results when O A. actual overhead is greater than expected. OB. production is greater than last year. O c. estimated overhead is greater than actual overhead. OD. actual overhead is greater than allocated overhead.
Answer
Correct Answer is Option : (D) : Actual overhead is greater than
allocated overhead.
Under allocated manufacturing overhead results when
actual overhead incurred is greater than the allocated
overhead. Allocated overhead is applied on a
pre-determined rate. If actual is more than allocated it is called
under allocated overhead and when actual overhead is less than
allocated overhead then it is called over allocated manufacturing
overheads.
