Final answer:
The statement is true; when actual indirect costs exceed allocated indirect costs, it means that the indirect costs have been underapplied and not enough has been charged to cover the actual overheads.
Step-by-step explanation:
When actual indirect costs exceed allocated indirect costs, it indicates that the indirect costs have been underapplied. This means that the actual costs incurred for operations were higher than what was estimated and allotted at the beginning of the period. As a consequence, the amount charged to the cost objects, such as products or services, was insufficient to cover the true overheads. Companies often adjust for these variances at the end of the accounting period to ensure that their financial statements are accurate.