Identify the appropriate way(s) to dispose of under- oroverallocated overhead costs. a. (1) Proration to materials inventory,
Question:
Identify the appropriate way(s) to dispose of under- oroverallocated overhead costs.
a.
(1) Proration to materials inventory, finished goods and cost ofgoods sold, (2) Year-end write-off to work-in-process inventory,(3) Restatement of all overhead entries using budgeted indirectcosts rates rather than actual indirect cost.
b.
(1) Proration to work-in-process, finished goods and cost ofgoods sold, (2) Year-end write-off to cost of goods sold, (3)Restatement of all overhead entries using actual indirect costsrates rather than budgeted indirect cost rates.
c.
(1) Proration to all operating expense accounts, (2) Year-endwrite-off to miscellaneous expense, (3) Restatement of all overheadentries using budgeted indirect costs rates rather than actualindirect cost.
d.
No entry is required to dispose of over- or underallocatedoverhead.
Expert Answer:
The detailed answer for the above question is provided below b 1 Proration to work... View the full answer
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
