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:
Factory 1 Factory 2
Estimated factory overhead cost for fiscal
year beginning August 1 $18,500,000 $44,000,000
Estimated direct labor hours for year 800,000
Estimated machine hours for year 1,250,000
Actual factory overhead costs for August $1,515,800 $3,606,300
Actual direct labor hours for August 64,500
Actual machine hours for August 105,000
Required:
a. Determine the factory overhead rate for Factory 1. Round your answer to two decimal places.
b. Determine the factory overhead rate for Factory 2.
c. Journalize the Aug. 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. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
d. Determine the balances of the factory overhead accounts for each factory as of August 31, and indicate whether the amounts represent overapplied factory overhead or underapplied factory overhead. Enter all amounts as positive numbers.
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