Final answer:
True, if manufacturing overhead is overallocated, the jobs are indeed overcosted, leading to higher cost of goods sold and understated income.
Step-by-step explanation:
If manufacturing overhead has been overallocated during the year, it is true that the jobs have been overcosted. Overallocation of manufacturing overhead means that the overhead applied to jobs during the manufacturing process is more than the actual overhead cost incurred.
As a result, the cost of goods sold is higher and income is understated. When overhead is overallocated, the company will need to adjust the cost of goods sold and inventory balances accordingly at the end of the period to reflect the actual overhead costs.