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 $1,504,500 Factory 2 $914,400 Estimated factory overhead cost for fiscal year beginning March 1 Estimated direct labor hours for year Estimated machine hours for year 25,400 50,150 Actual factory overhead costs for March $121,580 $107,200 Actual direct labor hours for March 2,930 Actual machine hours for March 4,100

Answer 1

a
Factory 1	30	per machine hour	=1504500/50150
b
Factory 2	36	per direct labor hour	=914400/25400

c
Date	Description	Post. Ref.	Debit	Credit
March 31	Work in Process		123000		=4100*30
	Factory Overhead			123000
March 31	Work in Process		105480		=2930*36
	Factory Overhead			105480

d
Factory 1	1420	Credit	Overapplied	=123000-121580
Factory 2	1720	Debit	Underapplied	=107200-105480