Your question:

How does the adjustment for overapplied overhead affect net income? Is it ethical for managers to intentionally overapply overhead to manipulate future net income?

The adjustment for overapplied overhead blank net income Answers and Explanation:

3. Comparison: If the applied overhead exceeds the actual overhead incurred, overapplied overhead occurs.

4. Adjustment: To rectify this, the company makes an adjusting entry. Debiting COGS reduces expenses on the income statement, leading to higher net income. Crediting Manufacturing Overhead reduces the overapplied amount on the balance sheet.