The approach often used when dealing with small amounts of underallocated or overallocated overhead is the ________ approach.

Question

Quizplus · Accepted Answer

Write-off to cost of goods sold is the best approach when dealing with small amounts of underallocated or overallocated overhead as it simplifies the accounting process and avoids creating unnecessary journal entries. The other options may be more appropriate for larger amounts or more significant variances.

The Approach Often Used When Dealing with Small Amounts of Underallocated