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

Cost of Work in Process Finished Goods Goods Sold Direct materials $20,000 $ 40,000 $ 60,000 Direct labor 10,000 20,000 25,000 Factory overhead 20,000 40,000 50,000

$50,000 $100,000 $135,000

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 components of the appropriate account balances.

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