At the end of the accounting period, a company's overhead was overapplied by $400. the factory overhead account was properly adjusted. what effect did the adjustment have on net income?
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Ответ:
The overapplied factory overhead results in more expense. The overapplied factory overhead results in increase in cost of good sold. Over-application means that actual overhead are less than reported expense. At the end of the accounting period the company will pass following accounting entry to adjust over application
Debit FOH account 400
Credit Cost of Good Sold 400
So after this adjustment the net income will increase by 400 dollars.
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