If a company chooses to allocate overapplied or underapplied overhead to all the accounts that contain applied overhead, which of the following is not a step in the process?

Question

Quizplus · Accepted Answer

Dividing the amount of overapplied or underapplied by three is not a step in the process of allocating overapplied or underapplied overhead to all accounts containing applied overhead. The correct steps are to add the ending balances in all the accounts, calculate the percentage of each to the total, and multiply each percentage by the underapplied or overapplied amount.

If a Company Chooses to Allocate Overapplied or Underapplied Overhead