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

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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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
Transcribed Image Text: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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