If a Company Chooses to Spread Overapplied or Underapplied Overhead

question 67

Multiple Choice

If a company chooses to spread overapplied or underapplied overhead to all the accounts that contain applied overhead, the proration should be based on

• A)the number of accounts.
• B)the relative size of the ending balance in each account.
• C)the account that has had the least overhead applied to it during the month.
• D)the amount of overhead applied to each account during the period.

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Definitions:

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The additional output resulting from the use of one more unit of a factor of production.

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