what predetermined oh rate was used during the year 641260

(Underapplied or overapplied overhead) At year end 2010, Dub’s Wind Generator Co. had a $40,000 debit balance in its Manufacturing Overhead Control account. Overhead is applied to products based on direct labor cost. Relevant account balance information at year end follows:

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Finished Goods

Cost of Goods

Inventory

Inventory

Sold

Direct material

$20,000

$ 80,000

$120,000

Direct labor

10,000

40,000

50,000

Factory overhead

20,000

80,000

100,000

$50,000

$200,000

$270,000

a. What predetermined OH rate was used during the year?

b. Provide arguments to be used for deciding whether to prorate the balance in the overhead account at year end.

c. Prorate the overhead account balance based on the relative balances of the appropri ate accounts.

d. Identify some possible reasons that the company had a debit balance in the over head account at year end.

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