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 can be eliminated by transferring the balance to Cost of Goods Sold. This is because manufacturing overhead costs are part of the cost of producing goods and should be included in the cost of goods sold when the goods are sold. If the balance is immaterial, it is not significant enough to be separately identified in the income statement, so it is included in cost of goods sold.

How Does a Company Eliminate Any Immaterial Balance in the Manufacturing