Assume that a company closes out any manufacturing overhead overapplied or underapplied to cost of goods sold. Then in the Schedule of Cost of Goods Sold, Adjusted cost of goods sold = Unadjusted cost of goods sold + Overapplied overhead − Underapplied overhead.

Question

Quizplus · Accepted Answer

The adjusted cost of goods sold is calculated by adding underapplied overhead or subtracting overapplied overhead from the unadjusted cost of goods sold.

Assume That a Company Closes Out Any Manufacturing Overhead Overapplied