An underallocation of manufacturing overhead is typically corrected by increasing Cost of Goods Sold on the income statement.

Name: An underallocation of manufacturing overhead is typically corrected by increasing Cost of Goods Sold on the income statement.
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When manufacturing overhead is underallocated, it means that not enough overhead costs were applied to products. To correct this, the Cost of Goods Sold is increased to reflect the actual overhead costs incurred.

An Underallocation of Manufacturing Overhead Is Typically Corrected by Increasing