Proration is the spreading of underallocated or overallocated overhead among ending work in process, finished goods, and costs of goods sold.

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Proration is a method used to distribute or allocate any underallocated or overallocated overhead among different categories of inventory or costs, such as work in process, finished goods, and costs of goods sold. This helps to ensure that each category absorbs its fair share of overhead costs, and ultimately leads to more accurate product costs and financial statements.

Proration Is the Spreading of Underallocated or Overallocated Overhead Among