If the amount of overapplied overhead is not material, the amount should be closed to Cost of Goods Sold.

Question

Quizplus · Accepted Answer

If the amount of overapplied overhead is not material, it can be closed to Cost of Goods Sold as it will not have a significant impact on the financial statements. This is in accordance with generally accepted accounting principles, which allow for immaterial amounts to be recorded in a reasonable manner that does not distort the financial statements.

If the Amount of Overapplied Overhead Is Not Material, the Amount