Question

Manufacturing overhead is overallocated if the amount

A. allocated during the period is greater than the actual amount incurred.
B. allocated during the period is less than the actual amount incurred.
C. estimated for the period is greater than the actual amount incurred.
D. amount estimated for the period is less than the actual amount incurred.

Answer 1

A. allocated during the period is greater than the actual amount incurred.

Step-by-step explanation:

As we know that

Manufacturing cost is the sum of direct material cost, direct labor cost and the manufacturing overhead cost

In mathematically,

Manufacturing overhead cost = Purchase of direct material + Direct labor cost + Manufacturing Overhead cost

When the manufacturing overhead shows the over allocated that means the allocated amount is more than the actual amount incurred and if there is under allocated the condition would be opposite