Week 7 - Job Order Costing Accounting and Overhead Allocation and Apportionment V

Question 1

What does underapplied overhead mean?

Answer 1

Applied overhead is less than actual overhead

Question 2

What does overapplied overhead mean?

Answer 2

Applied overhead is greater than actual overhead

Question 3

What do we do in method 1 if overhead is underapplied?

Answer 3

Increase the cost of goods sold

Question 4

What do we do in method 2 if overhead is underapplied?

Answer 4

Increase
- work in process
- cost of goods sold
- finished goods

Question 5

What do we do in method 1 if overhead is overapplied?

Answer 5

Decrease the cost of goods sold

Question 6

What do we do in method 2 if overhead is overapplied?

Answer 6

Decrease
- work in process
- cost of goods sold
- finished goods