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in this video were going to talk about how to dispose of the under applied or over applied manufacturing overhead balance so theres two except that approaches and one is to close that balance to cost of goods sold so youre basically burying this difference in to cost of goods sold completely the second approach is instead of just bearing it all in costs of goods sold you allocate it and you allocate it among the following accounts work in process finished goods and cost of goods sold now this kind of is a more intuitive approach here that to allocate it because youre basically youve youve over applied to all these accounts right youve been applying overhead and now youre just basically trying to undo the mistakes so to speak or the incorrect estimation whereas in what this approach is easier but were just kind of dumping it all in cost of goods sold so lets deal with the easier of the two approaches first where we just close everything to cost a good sold so let me just scro