The method that restates all overhead entries in the general ledger and subsidiary ledgers using actual cost rates rather than budgeted cost rates is called ________.
A) the adjusted allocation rate approach
B) the proration approach
C) the write-off of cost of goods sold approach
D) the weighted-average cost approach

Question

Quizplus · Accepted Answer

The adjusted allocation rate approach calculates the actual overhead costs incurred during a period and then allocates those costs to products or services using actual cost rates rather than budgeted rates. This ensures that the costs allocated to each product or service accurately reflect the actual amount of overhead costs incurred during the period, rather than being based on estimates or projections. The other options listed (proration approach, write-off of cost of goods sold approach, and weighted-average cost approach) do not involve restating overhead entries using actual cost rates.

The Method That Restates All Overhead Entries in the General