The approach often used when dealing with small amounts of underallocated or overallocated overhead is the ________.
A) adjusted allocation-rate approach
B) proration approach
C) write-off to cost of goods sold approach
D) adjusted write-off approach

Question

Quizplus · Accepted Answer

The write-off to cost of goods sold approach is commonly used for small amounts of underallocated or overallocated overhead because it is simple and the amounts are typically not large enough to significantly distort cost of goods sold.

The Approach Often Used When Dealing with Small Amounts of Underallocated