1.) Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $276,900; materials of $403,000 and direct labor of $213,000. During the year Adams incurred $411,000 in materials costs, $414,600 in overhead costs and $217,000 in direct labor costs. Compute the overhead application rate.

Multiple Choice

130%.

69%.

77%.

191%.

188%.

2.) Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $580,000, and direct labor costs to be $290,000. Actual overhead costs for the year totaled $596,000, and actual direct labor costs totaled $324,000. At year-end, the balance in the Factory Overhead account is a:

Multiple Choice

$596,000 Debit balance.

$324,000 Debit balance.

$52,000 Credit balance.

$648,000 Credit balance.

$52,000 Debit balance.