If the under- or overapplied overhead amount is considered material, which of the following accounts would be the least likely to be adjusted at the end of the year?
A) Work-in-process
B) Finished goods
C) Cost of goods sold
D) Raw materials

Question

Quizplus · Accepted Answer

Raw materials inventory is least likely to be adjusted for under- or overapplied overhead because it reflects the cost of materials that have not yet entered the production process, whereas adjustments for overhead typically affect accounts directly involved in production or product costing.

If the Under- or Overapplied Overhead Amount Is Considered Material