Factory Overhead Rates, Entries, and Account Balance 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: 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. Factory 1$ Factory 2$