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 Required: A. Determine the factory overhead rate for Factory 1. Round the answer to two decimal paces. B. Determine the factory overhead rate for Factory 2. Round the answer to two decimal paces. C. Journalize the Mar. 31 entries to apply factory overhead to production in each factory for March. Refer to the Chart of Accounts for exact wording of account titles. When required, round your answers to the nearest dollar.

Name: Sundance Solar Company operates two factories. The company applies fac
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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 factory overhead costs, direct labor hours, and mach

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FINANCIAL ACCOUNTING

10th Edition

ISBN: 9781259964947

Author: Libby

Publisher: MCG

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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:

	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

Required:

A.	Determine the factory overhead rate for Factory 1. Round the answer to two decimal paces.
B.	Determine the factory overhead rate for Factory 2. Round the answer to two decimal paces.
C.	Journalize the Mar. 31 entries to apply factory overhead to production in each factory for March. Refer to the Chart of Accounts for exact wording of account titles. When required, round your answers to the nearest dollar.
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. When required, round your answers to the nearest dollar. Enter your answer as a positive number.