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At the end of the year, overhead applied was $3,737,000. Actual overhead was $3,430,000. Closing over/underapplied...

At the end of the year, overhead applied was $3,737,000. Actual overhead was $3,430,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to a.increase by $614,000 b.decrease by $614,000 c.increase by $307,000 d.decrease by $307,000

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Expert Solution

Working as follows:

Overapplied overhead will increase in the net income:

Overhead Applied $3,737,000
Less: Actual overhead ($3,430,000)
Net Income increase by $307,000

Hence, the correct option is [c]

ekkarill92 answered 2 years ago
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