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: Estimated factory overhead cost for fiscal year beginning August 1 Estimated direct labor hours for year Estimated machine hours for year Actual factory overhead costs for August Actual direct labor hours for August Actual machine hours for August a. Determine the factory overhead rate for Factory 1. 36 per machine hour b. Determine the factory overhead rate for Factory 2. 75 Feedback per direct labor hour Factory 1 Factory 2 $654,120 $1,185,000 15,800 18,170 $52,400 $102,240 1,420 1,420 Check My Work a-b. Factory 1 overhead is applied based on machine hours. Factory 2 overhead is applied