EX 19-8 Factory overhead rates, entries, and account balance OBJ. 2 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 Estimated direct labor hours for year $12,900,000 $10,200,000 250,000 Estimated machine hours for year 600,000 Actual factory overhead costs for March $12,990,000 $10,090,000 Actual direct labor hours for March 245,000 Actual machine hours for March 610,000 a. Determine the factory overhead rate for Factory 1. b. Determine the factory overhead rate for Factory 2. c. Journalize the entries to apply factory overhead to production in each factory for March. d. Determine the balances of the factory overhead accounts for each factory as of March 31 and indicate whether the amounts represent over- or underapplied fac- tory overhead.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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EX 19-8 Factory overhead rates, entries, and account balance
OBJ. 2
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
Estimated direct labor hours for year
$12,900,000
$10,200,000
250,000
Estimated machine hours for year
600,000
Actual factory overhead costs for March
$12,990,000
$10,090,000
Actual direct labor hours for March
245,000
Actual machine hours for March
610,000
a. Determine the factory overhead rate for Factory 1.
b. Determine the factory overhead rate for Factory 2.
c. Journalize the entries to apply factory overhead to production in each factory for
March.
d. Determine the balances of the factory overhead accounts for each factory as of
March 31 and indicate whether the amounts represent over- or underapplied fac-
tory overhead.
Transcribed Image Text:EX 19-8 Factory overhead rates, entries, and account balance OBJ. 2 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 Estimated direct labor hours for year $12,900,000 $10,200,000 250,000 Estimated machine hours for year 600,000 Actual factory overhead costs for March $12,990,000 $10,090,000 Actual direct labor hours for March 245,000 Actual machine hours for March 610,000 a. Determine the factory overhead rate for Factory 1. b. Determine the factory overhead rate for Factory 2. c. Journalize the entries to apply factory overhead to production in each factory for March. d. Determine the balances of the factory overhead accounts for each factory as of March 31 and indicate whether the amounts represent over- or underapplied fac- tory overhead.
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