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 $12,900,000 $10,200,000 Estimated direct labor hours for year 250,000 Estimated machine hours for year 600,000 Actual factory overhead costs for March $1,082,500 $840,833 Actual direct labor hours for March 20,416 Actual machine hours for March 50,833 a. Determine the factory overhead rate for Factory 1. Round the answer to two decimal places. 2$ 21.50 V per machine hour b. Determine the factory overhead rate for Factory 2. Round the answer to two decimal places. 40.80 per direct labor hour

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 $12,900,000 $10,200,000 Estimated direct labor hours for year 250,000 Estimated machine hours for year 600,000 Actual factory overhead costs for March $1,082,500 $840,833 Actual direct labor hours for March 20,416 Actual machine hours for March 50,833 a. Determine the factory overhead rate for Factory 1. Round the answer to two decimal places. 2$ 21.50 V per machine hour b. Determine the factory overhead rate for Factory 2. Round the answer to two decimal places. 40.80 per direct labor hour

Name: Sundance Solar Company operates two factories. The company applies fa
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Description: 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 factoryoverhead costs, direct labor hours, and mach

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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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
$12,900,000
$10,200,000
Estimated direct labor hours for year
250,000
Estimated machine hours for year
600,000
Actual factory overhead costs for March
$1,082,500
$840,833
Actual direct labor hours for March
20,416
Actual machine hours for March
50,833
a. Determine the factory overhead rate for Factory 1. Round the answer to two decimal places.
2$
21.50 V per machine hour
b. Determine the factory overhead rate for Factory 2. Round the answer to two decimal places.
40.80
per direct labor hour

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