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    Calculation of Underapplied or Overapplied Overhead

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    At year end, records show that actual overhead costs incurred were $25,870 and the amount of overhead costs applied to production was $27,000. Identify the amount of under- or over applied overhead, and indicate whether the cost of goods sold account should be increased or decreased to reflect actual overhead costs.

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    Solution Preview

    Overhead are indirect manufacturing costs which include all manufacturing costs other than direct labor and direct material. Overhead is applied to production ...

    Solution Summary

    The solution explains how to calculate the under applied or over applied overhead

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