In practice,proration of overhead variances among the affected accounts is undertaken when it materially affects inventory valuations and net income.

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Proration of overhead variances is usually undertaken when it materially affects inventory valuations and net income, as it helps to allocate the cost of overheads in a fair and consistent manner among the different accounts. This can help to ensure that the financial statements accurately reflect the true economic impact of overhead costs on the company's operations, and can aid in decision-making, forecasting, and performance evaluation. However, if the overhead variances are immaterial, or if they are not expected to have a significant impact on inventory valuations or net income, proration may not be necessary or appropriate.

In Practice,proration of Overhead Variances Among the Affected Accounts Is