Question

Sundance Solar Company operates two factories. The company applies factory overhead to jobs on the basis of machine hours in Factory 1 and on the basis of direct labor hours in Factory 2. Estimated factory overhead costs, direct labor hours, and machine hours are as follows: Factory 1 Factory 2 Estimated factory overhead cost for fiscal year beginning March 1 $498,200 $768,000 Estimated direct labor hours for year 12,000 Estimated machine hours for year 24,910 Actual factory overhead costs for March $39,770 $66,360 Actual direct labor hours for March 1,080 Actual machine hours for March 1,940

a. Determine the factory overhead rate for Factory 1. $ per machine hour
b. Determine the factory overhead rate for Factory 2. $ per direct labor hour
c. Journalize the entries to apply factory overhead to production in each factory for March.
Factory 1
Factory 2
d. Determine the balances of the factory overhead accounts for each factory as of March 31, and indicate whether the amounts represent overapplied factory overhead or underapplied factory overhead.
Factory 1 $
Factory 2 $

Answer 1