If the underapplied factory overhead amount is material, it is transferred to Cost of Goods Sold at the end of the fiscal year.

Name: If the underapplied factory overhead amount is material, it is transferred to Cost of Goods Sold at the end of the fiscal year.
Brand: Quizplus
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Quizplus · Accepted Answer

If the underapplied factory overhead amount is material, it is typically allocated between Work in Process, Finished Goods, and Cost of Goods Sold, not just transferred entirely to Cost of Goods Sold.

If the Underapplied Factory Overhead Amount Is Material, It Is