The most common method for disposing of the balance in Manufacturing Overhead is to make a direct adjustment to Cost of Goods Sold.
The total sum that your company spent on expenses directly associated with the selling of goods is known as the cost of goods sold. Depending on the nature of your firm, this could also include raw materials, packaging, direct labor involved in making or selling the product, and items bought for resale.
The carrying value of the items sold during a specific time period is the cost of goods sold. One of the several formulas, such as specific identification, first-in-first-out, or average cost, is used to assign costs to specific commodities.
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