Which Method for Dealing with Under/over Allocated Overhead Provides the Most

question 20

Multiple Choice

Which method for dealing with under/over allocated overhead provides the most accurate inventory and cost of goods sold account balances?

• A) proration approach
• B) adjusted allocation-rate approach
• C) immediate write-off to cost of goods sold
• D) either proration or adjusted allocation-rate approach
• E) either the proration approach or the immediate write-off to cost of goods sold