Instead of proration, a company could choose to simply write-off the balance of any underallocated overhead to cost of goods sold providing the amount is immaterial.

Name: Instead of proration, a company could choose to simply write-off the balance of any underallocated overhead to cost of goods sold providing the amount is immaterial.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is true. If the amount of underallocated overhead is immaterial, the company may choose to write it off to cost of goods sold rather than prorating it.

Instead of Proration, a Company Could Choose to Simply Write-Off