Overhead Rate Calculation: Adjusting Cost of Goods Sold. The Mason Machine Company applies variable factory overhead on the basis of machine hours and fixed factory overhead on the basis of direct labor hours. For 20x1, the company expected variable factory overhead to total $60,000 and fixed factory overhead to total $350,000. Expected machine hours were 100.000 and direct labor. hours were 200,000. Actual results for 20x1 were as follows: Vanable factory overhead incurred.... Fixed factory overhead incurred Actual machine hours... Actual direct labor hours. $ 61.000 $340,000 $8,000 hours 198,000 hours Required:

a. Determine the variable and fixed factory overhead rates for 20x1.

b. Prepare journal entries as of December 31, 20x1, to adjust cost of goods sold for the amount of underapplied or overupplied factory overhead.