Chapter 2, Problem 9E

Eclipse 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:

1. a. Determine the factory overhead rate for Factory 1.
2. b. Determine the factory overhead rate for Factory 2.
3. c. Journalize the entries to apply factory overhead to production in each factory for August.
4. d. Determine the balances of the factory overhead accounts for each factory as of August 31, and indicate whether the amounts represent over- or underapplied factory overhead.