Question

Factory Overhead Rates, Entries, and Account Balance Eclipse Solar Company operates two factories. The company applies factory overhead to jobs on the basis of machine hours hours in Factory 2. Estimated factory overhead costs direct labot hours, and machine hours are as follow Factory2 7700 $1,110 DOO 3 15 000 Estimated factory overhead cost for fiscal year beginning August 1 Estimated direct labor hours for year Estimated machine hours for year Actual factory overhead costs for August Actual direct labor hours for August Actual machine hours for August 130.220 $99,900 1,350 1340 a. Determine the factory overhead rate for Factory per machine hour b. Determine the factory overhead rate for Factory 2 per direct labor hou c. Journalize the entries to apply factory overed to production in each factory for August. If an amount box does not require an entry leave R ank Factory 1

Answer 1

a
Factory overhead rate for Factory 1	22	per machine hour	=377080/17140
b
Factory overhead rate for Factory 2	74	per direct labor hour	=1110000/15000
c
Factory 1:
Work in process	29480		=1340*22
Factory overhead		29480
Factory 2:
Work in process	99900		=1350*74
Factory overhead		99900
d
Factory 1	740	Debit	Underapplied	=30220-29480
Factory 2	4000	Credit	Overapplied	=99900-95900