ACC 202 Study Guide - Finished Good
Document Summary
Manufacturing overhead is overapplied if the applied cost is greater than the actual overhead cost. Applied overhead means the overhead that was applied to the jobs. Actual overhead is the items that cannot be seen such as indirect labor, depreciation expense, utilities expense, supplies expense and maintenance expense. To adjust the accounts for the over or underapplied overhead: Add or subtract it from cost of goods sold. Allocate it between work in process, finished goods and cost of goods sold. To allocate manufacturing overhead to cost of goods sold. Cost of goods manufactured = total manufacturing cost charged to jobs. Cost of goods sold = beginning finished goods inventory. Then once these steps are completed, add or subtract the applied manufacturing overhead to get the adjusted cost of goods sold. Plantwide overhead rate the predetermined overhead rate for an entire factory. Costs whose total dollar amount varies in direct proportion to chances in the activity level.
