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1. Calculate the predetermined overhead rate used during the year and compute the over or under application of overhead at year end 2. The company

1. Calculate the predetermined overhead rate used during the year and compute the over or under application of overhead at year end

2. The company writes off overhead variances to cost of goods sold. What would have been the effect on the annual income statement and year end balance sheet, had the company used the actual overhead rate (as discovered at year end), throughout the year, instead of the predetermined rate?

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