At the current year-end, Ruiz Company found that its overhead was underapplied by $2,500, and this amount was not considered material. Based on this information, Ruiz should:
A. do nothing about the $2,500, since it is not material, and it is likely that overhead will be overapplied by the same amount next year.
B. close the $2,500 to Cost of Goods Sold.
C. carry the $2,500 to the next period.
D. close the $2,500 to Finished Goods Inventory.
E. carry the $2,500 to the income statement as "Other Expense".
Answer: B
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