Question

The amount of overhead applied to a particular job equals the actual amount of overhead caused by the job. True or False True False

Answer 1

Solution:

The above statement is FALSE.

Applied overhead is defined as the amount of overhead assigned to the goods produced. It is generally computed based on predetermined overhead rate.

However Actual overhead is defined as indirect factory overhead incurred in the production process. These are the true costs that are incurred in production process of a particular product.

From the above we can understand that the amount of overhead applied to particular job equals the actual amount of overhead caused by the particular job is FALSE

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