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Hassan company uses the proration approach to accounting for the overhead cost. At the end of 2019, the company records showed the following ending balances:
Hassan company uses the proration approach to accounting for the overhead cost. At the end of 2019, the company records showed the following ending balances: COGS: $70,000; Finished goods: $20,000; Work in process: $10,000. The actual manufacturing overhead cost for the year was $200,000 and the allocated one was $150,000.
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1. What is the difference approaches we can use them to allocate the over or under balances of the overhead cost? (4 Points)
2.Calculate the over/under allocated balance and prepare the adjusted entry. (3 Points)
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