Final answer:
The question pertains to a situation where the manufacturing overhead costs applied are greater than the actual costs incurred. The correct term for this situation is 'overapplied.' The identification of overapplied overhead impacts the financial statements and requires adjustments accordingly. the correct answer is B.
Step-by-step explanation:
When considering the question, “If the manufacturing overhead costs applied to jobs worked on were greater than the actual manufacturing costs incurred during a period, overhead is said to be what?”, we need to understand how overhead costs are allocated in accounting. Manufacturing overhead consists of all the costs that are incurred to produce a product that cannot be directly attributed to the product itself. This includes things like utilities, depreciation of equipment, and salaries of supervisors.
In cost accounting, companies estimate the overhead cost at the beginning of the accounting period and apply these estimated costs to the products throughout the period. At the end of the period, these applied costs are compared to the actual overhead costs incurred. If the costs applied to jobs are greater than the actual overhead costs, this means the company has charged too much overhead to the products, and therefore, the overhead is considered to be overapplied. Conversely, if the applied overhead is less than the actual overhead, it would be underapplied.
In this scenario described by the question, the correct answer is B. overapplied. This situation will typically lead to an adjustment in the financial statements, where the overapplied amount will decrease the cost of goods sold or increase the inventory value, depending on how the overapplied overhead is treated in the company's accounting policies.