Which of the following would possibly be adjusted as an end-of-period adjustment, using the adjusted allocation rate approach?
A) individual job records
B) ending work-in-process and finished goods inventories
C) cost of goods sold
D) only individual job records and ending finished goods inventory
E) ending work-in-process and finished goods inventories, individual job records, and cost of goods sold

Question

Quizplus · Accepted Answer

The adjusted allocation rate approach involves adjusting the predetermined overhead rate at the end of the period using actual overhead and activity levels. This affects the allocation of overhead to individual jobs through individual job records. It also affects the valuation of ending work-in-process and finished goods inventories, as well as the cost of goods sold, making all of them possible items for adjustment at the end of the period. Therefore, the best choice is E, which includes all three items.

Which of the Following Would Possibly Be Adjusted as an End-Of-Period