Question: How do companies handle underapplied or overapplied overhead at the end of the period? It is applied to Finished Goods and Work in Process inventory

How do companies handle underapplied or overapplied overhead at the end of the period?
It is applied to Finished Goods and Work in Process inventory
It is expensed directly on the income statement
It is left unadjusted and carried over to the next period
It is allocated to Work in Process, Finished Goods, and Cost of Goods Sold

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