It was the end of the fiscal year, and Laura 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: Budgeted MOH cost Budgeted direct labor hours Actual MOH cost Actual direct labor hours $72,240 42,000 hours $75,000 40,000 hours Laura 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." Laura also has the following additional detail regarding the inventory accounts