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5 October, 06:10

When overapplied / underapplied overhead is prorated, the basis for proration is:?

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  1. 5 October, 09:10
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    Proration occurs because it is impossible to accurately estimate the future overhead costs and production activity; it is either the overhead is over applied or under applied. The variance will have to be adjusted for at the end of the financial year.
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