If a Company Applies Overhead to Production with a Predetermined

Multiple Choice

If a company applies overhead to production with a predetermined overhead rate, a credit balance in the Factory Overhead account at the end of the period means that:

A) The overhead was underapplied for the period.
B) Actual overhead was greater than the overhead amount applied to production.
C) The bookkeeper has made an error because the debits don't equal the credits.
D) The balance will be carried forward to the next period as an overhead cost.
E) Actual overhead incurred was less than the overhead amount applied to production.