Question

Usually, under- or over applied overhead is considered to be an adjustment to ______

Answer 1

The average fixed cost curve is a downward sloping curve that decreases as the quantity of output increases. Spreading the overhead refers to distributing the fixed cost over a larger volume of output, resulting in a lower cost per unit.

Step-by-step explanation:

The average fixed cost curve is a downward sloping curve. As the quantity of output increases, the average fixed cost decreases. This is because the fixed cost is spread over a larger quantity of output, resulting in a lower cost per unit.

"Spreading the overhead" means distributing the fixed cost over a larger volume of output. By spreading the overhead, the average fixed cost decreases, making each unit of output less expensive.