____________________ spreads under-allocated overhead or over-allocated overhead among ending work- in-process inventory,finished goods inventory and cost of goods sold.

Question

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Proration spreads the under/over-allocated overhead among the different inventory accounts and cost of goods sold based on their respective proportions of the total overhead cost. This method is used to distribute the overhead cost evenly among the accounts affected by it. Allocation and Attribution are also related to the distribution of overhead costs but may not necessarily involve the same level of proportionality as proration. Normalization is not a term commonly used in the context of overhead cost distribution.

____________________ Spreads Under-Allocated Overhead or Over-Allocated Overhead Among Ending Work-