At year-end 2013, 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:
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 appropriate accounts. d. Identify some possible reasons that the company had a debit balance in the overhead account atyear-end.