Question

When the allocated amount of indirect costs are less than the actual​ amount, indirect costs have been​ ________. A. overallocated B. perfectly allocated C. underallocated D. within budget

Answer 1

C. underallocated

Step-by-step explanation:

Underallocated amount is that which did not match the actual overhead incurred and it is lower than the actual. While budgeting the estimated overheads are allocated to different departments / products using different basis. Total allocated amount then compared with the actual overheads incurred. Which ultimately result in under / over allocated overhead.