An approach in which, the over allocated and under allocated is spread in, ending balance of finished goods control, is called ___________?
Correct answer: D. proration approach
- A. allocation approach
- B. unadjusted approach
- C. adjusted approach
- D. proration approach
Explanation
Proration spreads underapplied or overapplied overhead among ending work in process, finished goods, and cost of goods sold balances. This differs from the adjusted approach, which transfers the entire variance to cost of goods sold.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
Practise Cost Accounting
941 free Cost Accounting MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Accounting questions like this
Accounting is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Cost Accounting questions
The budgeted fixed manufacturing cost for per unit, which is used to measure per unit cost of supplying is called ___________?
In absorption costing, the contribution margin per unit, fixed operating and manufacturing costs are all the dependents of ___________?
An income statement in absorption costing follows the format of ___________?
The capacity utilization of the business, to satisfy average customer's demand, for current budget period of time is termed as ___________?
An approach in which restating the amounts, in general ledgers by using actual cost rates, is classified as __________?
The fixed rate of calculation is based on the _________?