Final answer:
The proration approach adjusts individual job-cost records for overapplied or underapplied overhead.
Step-by-step explanation:
The proration approach to allocating overapplied or underapplied overhead adjusts individual job-cost records. This statement is true. When overhead costs are overapplied or underapplied, it means that the actual overhead costs incurred by a company differ from the overhead costs allocated to its products or jobs. To rectify this, the proration approach is used to distribute the overapplied or underapplied amount among the individual job-cost records based on a predetermined allocation base such as direct labor hours or machine hours.