How does a company eliminate any immaterial balance in the Manufacturing Overhead account at the end of the year?

Question

Quizplus · Accepted Answer

Immaterial balances in the Manufacturing Overhead account are typically not significant enough to warrant carrying forward to the next accounting period. Instead, they are often closed out to Cost of Goods Sold at the end of the year to ensure that all production costs are properly allocated to the goods sold during that period. This can be done through a journal entry that debits Manufacturing Overhead and credits Cost of Goods Sold for the amount of the immaterial balance.

How Does a Company Eliminate Any Immaterial Balance in the Manufacturing