Question

At the current year-end, Simply Company found that its overhead was underapplied by $2,500, and this amount was not considered material. Based on this information, Simply should:

Answer 1

Answer:

Close to the cost of goods sold

Explanation:

Since in the question it is mentioned that the simply found that the overhead was underapplied by $2,500 that means the expected overhead is less than the actual one

So the same is to close to the cost of goods sold account i.e. expenses account

Therefore the simply should close the $2,500 of underapplied overhead to the cost of goods sold