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in this video were going to discuss the adjusted allocation rate approach so this is a method for dealing with and disposing of any over or under applied manufacturing overhead balance if you remember theres a difference between the actual and the applied amount of manufacturing overhead and we have a several things that we can do with that one is we could just close out the balance to cost a good soul just bury it there another is we could actually prorate the balance the under or over applied balance among work in process inventory finished goods inventory and cost a good sold okay so we could do either of those approaches but it actually is the third approach where you can actually go back so some of you use job order costing and your actual manufacturing overhead exceeds what your applied was and you say okay we didnt apply enough manufacturing overhead lets go back to each and every job now that we know what the actual manufacturing overhead rate is lets go back to each job a