The Most Appropriate End-Of-Period Disposition of Underapplied or Overapplied Factory

question 110

Multiple Choice

The most appropriate end-of-period disposition of underapplied or overapplied factory overhead

• A) Is to close the amount to cost of goods sold.
• B) Is to close the amount to finished goods inventory only.
• C) Is to apportion the amount to finished goods inventory and cost of goods sold.
• D) Depends on the significance (that is, size) of the variance in question.
• E) Is to charge the amount as a period cost, e.g., "miscellaneous expense."

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