Use the information below to answer the following question(s) .Because the Abernathy Company used a budgeted indirect cost allocation rate for its manufacturing operations, the amount allocated ($200,000) was different from the actual amount incurred ($225,000) .These were the respective ending balances in the Manufacturing Overhead Allocated and Manufacturing Overhead control accounts.Before disposition of under/overallocated overhead, the following information was available:
-What is the journal entry Abernathy Company should use to write-off the difference between allocated and actual overhead using the proration approach based on overhead allocated?
Definitions:
Economies of Scale
The cost advantages that enterprises obtain due to scale of operation, with cost per unit of output generally decreasing with increasing scale.
Technology
The application of scientific knowledge for practical purposes, especially in industry.
Positive Profits
The financial gain that occurs when total revenue exceeds total costs.
Long Run
A period in which all factors of production and costs are variable, allowing full adjustment to any change in market conditions.
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