Explain why factory overhead (FOH) must be assigned to products using a predetermined overhead rate (POHR) while direct material (DM) and direct labor (DL) are traced directly to jobs. Provide the formula to calculate POHR.

Explain the concept of under-applied and over-applied overhead and provide the journal entry to close FOH if it is under-applied (debit balance)..

Explain how direct material flows through the different accounts until it is sold..