The Proration Method of Disposing of Overhead Variances Assigns the Variance

question 12

Multiple Choice

The proration method of disposing of overhead variances assigns the variance in proportion to the sizes of the ending account balances to

• A) WIP and finished goods inventory.
• B) cost of goods sold and WIP inventory.
• C) direct materials and WIP inventory.
• D) cost of goods sold, WIP and finished goods inventory.

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Definitions:

Specialization

The process of focusing resources on the activities that lead to the greatest efficiency and output in production or services.

Nations

Significant populations sharing a common ancestry, historical background, cultural practices, or language, living together in a specific nation or region.

Subsidies

Financial support provided by the government to individuals or businesses to lower the cost of goods and services or to support industry.

Olive Growers

Individuals or entities involved in the cultivation of olive trees and the production of olives for consumption or the extraction of olive oil.