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:

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.

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Work in Pos Finished Goods Cost of Goods Direct material Direct labor Factory overhead Inventory 20,000 10,000 Inventory $ 80,000 40,000 80,000 $200,000 Sold $120,000 50,000 100,000 $270,000 20000 50,000