In the immediate write-off approach, overapplied overhead is regarded as _____.
A)a decrease in current income
B)a decrease in cost of goods sold
C)an addition to the cost of inventory
D)a reduction to the cost of inventory

Question

Quizplus · Accepted Answer

Overapplied overhead means that the actual overhead costs were less than what was applied to the products. In the immediate write-off approach, this excess is typically adjusted by decreasing the cost of goods sold, which reflects the correction of the overhead applied to the products sold.

In the Immediate Write-Off Approach, Overapplied Overhead Is Regarded as _____