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Fill in the blanks. When comparing actual overhead costs to applied overhead costs and it is determined that overhead costs w
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1. If overhead costs were under applied, the COST OF GOODS SOLD account would require a debit, and the OVERHEAD account would be credited by the under applied amount.

2. If overhead costs were over applied, the OVERHEAD account would require a debit entry, and the COST OF GOODS SOLD account would be credited by the over applied amount.

Explanation - If overhead costs are under applied, it means we have to increase the overhead cost. And the under applied costs are increased under cost of goods sold account. And cost of goods sold account is also a debit account. So, when costs are increased under this account, cost of goods sold account is debited.

If overhead costs are over applied, we decrease costs under cost of goods sold account. So, cost of goods sold account is credited.

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