Job Order Costing for Under allocated or Over allocated Overhead year end manufacturing overhead adjustment using the proration method, example based on over allocated overhead, calculates the budgeted (applied) overhead rate & actual overhead rate, based on the rates the total actual & applied overhead cost are determined, the difference between actual & applied is prorated using the proration method, Spread Adjustment (Under/Over Allocated OVHD) between Ending Balance In WIP, Finished Goods & COGS, for manufacturing OVHD Over allocated, WIP, Finished Goods, COGS should be Decreased (Credited) Vs Increased (Debited) for Under allocation of OVHD, detailed example by Allen Mursau

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