(Underapplied or overapplied overhead) At year-end 2006, Zwylia Co. has a $50,000 debit balance in its Manufacturing Overhead Control account. Rele¬ vant account balance information at year-end follows:

a. What overhead rate was used during the year?

b. Provide arguments to be used for deciding whether to prorate the bal¬ ance in the overhead account at year-end.

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

d. Prorate the overhead account balance based on the relative overhead components of the appropriate account balances.

e. Identify some possible reasons that the company had a debit balance in the overhead account at year-end.LO1.

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