Use the Information Below to Answer the Following Question(s)

question 68

Multiple Choice

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?

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Definitions:

Price Level

Price level refers to the average of current prices across the entire spectrum of goods and services produced in the economy, a measure of inflation or deflation.

Inflation Rate

The percentage increase in the general price level of goods and services in an economy over a period of time, typically a year.

Consumer Confidence

Consumer confidence is a measure of how optimistic or pessimistic consumers are about their expected financial situation and the overall state of the economy.

Inflation Expectations

The rate at which people expect prices to rise in the future, which can influence their spending and saving behavior.