If a company applies overhead to production with a predetermined overhead rate, a credit balance in the Factory Overhead account at the end of the period means that:

Multiple Choice

• The bookkeeper has made an error because the debits don't equal the credits.

• The balance will be carried forward to the next period as an overhead cost.

• Actual overhead incurred was less than the overhead amount applied to production.

• The overhead was underapplied for the period.

• Actual overhead was greater than the overhead amount applied to production.