The amount of overallocation or underallocation is typically corrected by adjusting Cost of
Goods Sold on the income statement.

Question

Quizplus · Accepted Answer

The amount of overallocation or underallocation of overhead costs is typically corrected by adjusting the Cost of Goods Sold (COGS) on the income statement, ensuring that the reported financial results accurately reflect the actual costs incurred.

The Amount of Overallocation or Underallocation Is Typically Corrected by Adjusting