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Which of the following correctly explains what should be done with any under- or over-applied overhead? Monthly, any significant amount of under- or over-applied overhead
Which of the following correctly explains what should be done with any under- or over-applied overhead?
Monthly, any significant amount of under- or over-applied overhead should be closed to Cost of Goods Sold. |
At year end, if there is a significant amount of under- or over-applied overhead, it should all be closed to Cost of Goods Sold. |
At the end of a project, any insignificant under- or over-applied overhead should be closed to Work in Process prior to transferring the costs to Finished Goods. |
At year end, if there is a significant amount of under- or over-applied overhead, it should be allocated proportionally to Work in Process, Finished Goods, and Cost of Goods sold. |
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