Question: EXERCISE 2-2. Writing Assignment At Binder Electronics, the balance in manufacturing overhead (which represents over- or underapplied overhead) is always closed to Cost of Goods

EXERCISE 2-2. Writing Assignment At Binder Electronics, the balance in manufacturing overhead (which represents over- or underapplied overhead) is always closed to Cost of Goods Sold. This is done even when the balance is relatively large. Peter Lee, the controller, explains that this makes sense because Binder uses a just-in-time (JIT) manufacturing system and jobs are shipped to customers within hours of being completed.

Required Write a paragraph elaborating on the justification provided by Peter Lee. Why is there no need to apportion the balance in manufacturing overhead among work in process, finished goods, and cost of goods sold?

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