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Question 1 0 If a company incurred $ 5 , 2 5 0 in actual overhead costs and allocated $ 5 , 5 7 5

Question 10
If a company incurred $5,250 in actual overhead costs and allocated
$5,575 to jobs, was the overhead overallocated or underallocated? By
how much?
Underapplied overhead occurs when the actual overhead cost exceeds the
amount of overhead cost applied to Work in Process inventory during the
period.
The overhead is overallocated because the company allocated more than the
actual overhead costs. The amount is $325($5,575-$5,250).
This transaction increases assets (Raw Materials Inventory) and increases
liabilities (Accounts Payable).
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