At the end of the year, overhead applied was $3,733,000. Actual overhead was $3,242,000. Closing over/underapplied...

Question

Question

Answer 1

Answer #1

In the given question actual overhead is less than the applied overhead which results as Over application of overheads.

As per question Actual Overhead is, $ 3,242,000

Applied Overhead is, $ 3,733,000

Overapplied Overhead = $ 491,000

Due to this excess overhead expenses cost of goods sold will decrease and the final effect on Net Income will be an increase of $ 491,000.

Answer will be, a) Increase by $ 491,000.

Answer 2

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