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

question 154

Multiple Choice

Which method for dealing with under/over allocated overhead provides the most accurate individual job cost records?

• 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 would give same result
• E)either the proration approach or the immediate write-off to cost of goods sold

---

Definitions:

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity supplied by producers.

Value

The importance or worth that is attached to something by individuals or society, often reflected in what people are willing to exchange or pay for it.

Producer Surplus Gain

The difference between what producers are willing to accept for a good versus what they actually receive, often resulting from higher market prices.

Consumer Surplus Loss

The reduction in consumer surplus due to changes in market conditions such as price increases or decreases in available goods.