In the immediate write-off approach, underapplied overhead is regarded as _____.
A)a reduction in current income
B)an addition to the cost of inventory
C)a decrease in cost of goods sold
D)a decrease in the cost of inventory

Question

Quizplus · Accepted Answer

Under the immediate write-off approach, underapplied overhead is treated as a reduction in current income because it is immediately expensed in the period it occurs, rather than being allocated to the cost of inventory or cost of goods sold.

In the Immediate Write-Off Approach, Underapplied Overhead Is Regarded as _____