Adjusting of cost of goods sold for the underallocation or overallocation of manufacturing overhead is generally done:

Question

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The adjusting of cost of goods sold for the underallocation or overallocation of manufacturing overhead is done at the end of the period, after the actual overhead costs have been determined and compared to the predetermined overhead rate. This adjustment is necessary to ensure that the cost of goods sold reflects the actual overhead costs incurred during the period. Adjusting before or during the period would not be accurate as the actual overhead costs are not yet known.

Adjusting of Cost of Goods Sold for the Underallocation or Overallocation