The most common method for disposing of over- or underapplied overhead is to

Question

Quizplus · Accepted Answer

The most common method for disposing of over- or underapplied overhead is to make a direct adjustment to Cost of Goods Sold. This is because any over- or underapplied overhead represents a difference between the actual overhead incurred and the overhead charged to production, which ultimately affects the cost of goods sold. Making a direct adjustment to Cost of Goods Sold allows for the proper allocation of these costs and ensures accurate financial statements.

The Most Common Method for Disposing of Over- or Underapplied