When closing overapplied manufacturing overhead to cost of goods sold, which of the following would be true?
A) Work in process will decrease.
B) Cost of goods sold will increase.
C) Net income will decrease.
D) Gross margin will increase.

Question

Quizplus · Accepted Answer

When overapplied manufacturing overhead is closed to cost of goods sold, it decreases the cost of goods sold, which in turn increases the gross margin.

When Closing Overapplied Manufacturing Overhead to Cost of Goods Sold