Underallocated manufacturing overhead
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Underallocated manufacturing overhead is the amount of manufacturing overhead allocated to jobs is less than the amount of manufacturing overhead costs actually incurred; this results in jobs being undercosted.
Definitions
According to Managerial Accounting by Braun, Tietz (5th edition),
- Underallocated manufacturing overhead. The amount of manufacturing overhead allocated to jobs is less than the amount of manufacturing overhead costs actually incurred; this results in jobs being undercosted.
