(Underapplied or overapplied overhead) Rebecca Company uses a normal cost sys¬ tem. At year-end, the balance in the manufacturing overhead control account is a $50,000 debit. Information concerning relevant account balances at year-end are as follows:

a. What overhead 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. Prorate the overhead account balance based on the relative overhead com¬ ponents of the appropriate account balances.

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

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Direct material WORK IN PROCESS FINISHED GOODS COST OF GOODS SOLD $20,000 Direct labor 10,000 Factory overhead 20,000 $50,000 $ 40,000 20,000 40,000 $100,000 $ 60,000 25,000 50,000 $135,000