What is the most common treatment of the fixed-overhead budget variance at the end of the accounting period?
A) Reported as a deferred charge or credit.
B) Allocated among Work-in-Process Inventory, Finished-Goods Inventory, and Cost of Goods Sold.
C) Charged or credited to Cost of Goods Sold.
D) Allocated among Cost of Goods Manufactured, Finished-Goods Inventory, and Cost of Goods Sold.
E) Charged or credited to Income Summary.

Question

Quizplus · Accepted Answer

The most common treatment of the fixed-overhead budget variance is to charge or credit it to Cost of Goods Sold, as it directly affects the cost of production and ultimately the profitability of the company.

What Is the Most Common Treatment of the Fixed-Overhead Budget