Which approach is known for spreading the underallocated overhead or overallocated overhead among ending work-in-process inventory,finished goods inventory,and cost of goods sold?

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Proration is a common approach used for spreading underallocated or overallocated overhead among ending work-in-process inventory, finished goods inventory, and cost of goods sold. Under proration, the total amount of underallocated or overallocated overhead is divided among these three accounts based on their respective amounts. This approach is relatively simple and easy to apply, and it ensures that the impact of overhead allocation errors is spread out evenly across all affected accounts. As such, proration is considered to be one of the most effective and fair methods for dealing with issues arising from overhead allocation.

Which Approach Is Known for Spreading the Underallocated Overhead or Overallocated