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Overhead application to costs is a critical issue for the

Overhead application to costs is a critical issue for the costing of your products. We are studying several ways to handle this situation.

  • Describe overhead and the overhead application process.
  • What would cause an overhead to be overapplied, or underapplied.
  • Discuss the results to your decision making and the financial statements for each of those two situations.
  • Describe how the over or under application of overhead should be corrected in the accounting records.

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