It was the end of the fiscal year, and Dorothy was evaluating her company's MOH. Since her company uses normal costing and applies overhead based on direct labor hours, she anticipated a difference in the amount of MOH that was applied compared to the amount that was actually incurred. Indeed, there was a difference-and it seemed huge! Here is what she saw within the MOH account, as well as detail from the beginning of the year when the budgeted MOH rate was determined: Dorothy is aware of the following company policy regarding any MOH difference: "any MOH difference that is deemed 'immaterial' should be written off in the current period; any MOH difference that was deemed 'material' should be prorated to the appropriate accounts so as to better approximate actual costs." Dorothy also has the following additional detail regarding the inventory accounts. While she does not yet have a clear understanding of what amount might be considered "material," 2,550 knows she has to first calculate the MOH balance