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 $1,337,700 $950,400 Estimated direct labor hours for year 26,400 Estimated machine hours for year 51,450 Actual factory overhead costs for March $110,730 $107,750 Actual direct labor hours for March 2,940 Actual machine hours for March 4,320 Required: a. Determine the factory overhead rate for Factory 1. b. Determine the factory overhead rate for Factory 2. c. Journalize the Mar. 31 entries to apply factory overhead to production in each factory. Refer to the chart of accounts for the exact wording of the account titles. d. Determine the balances of the factory overhead accounts for each factory as of March 31, and indicate whether the amounts represent overapplied factory overhead or underapplied factory overhead. CHART OF ACCOUNTS Sundance Solar Company General Ledger ASSETS 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable 131 Materials 132 Work in Process 133 Factory Overhead 134 Finished Goods 141 Supplies 142 Prepaid Insurance 143 Prepaid Expenses 181 Land 191 Factory 192 Accumulated Depreciation-Factory LIABILITIES 210 Accounts Payable 221 Utilities Payable 231 Notes Payable 236 Interest Payable 241 Lease Payable 251 Wages Payable 252 Consultant Fees Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends 390 Income Summary
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 $1,337,700 $950,400 Estimated direct labor hours for year 26,400 Estimated machine hours for year 51,450 Actual factory overhead costs for March $110,730 $107,750 Actual direct labor hours for March 2,940 Actual machine hours for March 4,320 Required: a. Determine the factory overhead rate for Factory 1. b. Determine the factory overhead rate for Factory 2. c. Journalize the Mar. 31 entries to apply factory overhead to production in each factory. Refer to the chart of accounts for the exact wording of the account titles. d. Determine the balances of the factory overhead accounts for each factory as of March 31, and indicate whether the amounts represent overapplied factory overhead or underapplied factory overhead. CHART OF ACCOUNTS Sundance Solar Company General Ledger ASSETS 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable 131 Materials 132 Work in Process 133 Factory Overhead 134 Finished Goods 141 Supplies 142 Prepaid Insurance 143 Prepaid Expenses 181 Land 191 Factory 192 Accumulated Depreciation-Factory LIABILITIES 210 Accounts Payable 221 Utilities Payable 231 Notes Payable 236 Interest Payable 241 Lease Payable 251 Wages Payable 252 Consultant Fees Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends 390 Income Summary
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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:
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Factory 1
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Factory 2
|
| Estimated factory overhead cost for fiscal year beginning March 1 | $1,337,700 | $950,400 |
| Estimated direct labor hours for year | 26,400 | |
| Estimated machine hours for year | 51,450 | |
| Actual factory overhead costs for March | $110,730 | $107,750 |
| Actual direct labor hours for March | 2,940 | |
| Actual machine hours for March | 4,320 |
Required:
| a. Determine the factory overhead rate for Factory 1. | |
| b. Determine the factory overhead rate for Factory 2. | |
| c. Journalize the Mar. 31 entries to apply factory overhead to production in each factory. Refer to the chart of accounts for the exact wording of the account titles. | |
| d. Determine the balances of the factory overhead accounts for each factory as of March 31, and indicate whether the amounts represent overapplied factory overhead or underapplied factory overhead. |
| CHART OF ACCOUNTS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sundance Solar Company | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Ledger | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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