Factory Overhead Rates, Entries, and Account Balance Sundance Solar Company operates two factories. The...
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Accounting
Factory Overhead Rates, Entries, and Account Balance
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
$740,520
$860,700
Estimated direct labor hours for year
15,100
Estimated machine hours for year
20,570
Actual factory overhead costs for March
$59,040
$74,420
Actual direct labor hours for March
1,360
Actual machine hours for March
1,600
a. Determine the factory overhead rate for Factory 1.
b. Determine the factory overhead rate for Factory 2.
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