1.You have been hired by Thompson Waterfall Manufacturing. Your first task is examine different distribution methods for applying factory overhead to the various production orders that are processed during a year. The following information was taken from the annual budget:

Direct labor hours	80,000
Machine hours	160,000
Manufacturing costs:
Direct labor	$400,000
Direct materials	190,000
Indirect labor	65,000
Electric power	46,000
Payroll taxes	12,800
Machine maintenance and repair	10,200
Factory supplies	17,000
Factory heat and light	15,000
Depreciation, taxes, and insurance:
Factory buildings	124,000
Machinery	310,000
	$1,190,000

Required: a.Determine the following factory overhead application rates under each of the following methods: (1) Direct labor cost (2) Direct labor hours (3) Machine hours

b. What are the uses of FOH application rates? Explain