Instead of Proration, a Company Could Choose to Simply Write-Off

question 50

True/False

Instead of proration, a company could choose to simply write-off the balance of any underallocated overhead to cost of goods sold providing the amount is immaterial.

---

Definitions:

Product

An item, system, or service created through a process and offered in the market to satisfy the needs or wants of consumers.

Equity Crowdfunding

A method of raising capital through the sale of small equity stakes in a business to a large number of investors via online platforms.

Formal Investment

The act of putting money into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit, typically through an official or regulated framework.

Bootstrapping

Starting a business with minimal financial resources and relying on one's own efforts and funds rather than seeking significant external funding.