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

Question

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Adjusting the cost of goods sold for the underallocation or overallocation of manufacturing overhead is usually done at the end of the period after the actual manufacturing overhead cost has been determined. This is because the allocation of manufacturing overhead is based on estimates and is subject to variances. The adjustment is made to ensure that the cost of goods sold accurately reflects the actual cost of production.

Adjusting of Cost of Goods Sold for the Underallocation or Overallocation