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:

	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

Question Content Area

a. Determine the factory overhead rate for Factory 1. Round your answer to two decimal places. fill in the blank 1 of 2$ per machine hour

b. Determine the factory overhead rate for Factory 2. fill in the blank 2 of 2$ per direct labor hour

Question Content Area

c. Journalize the entries to apply factory overhead to production in each factory for August. If an amount box does not require an entry, leave it blank.

Transaction	Account	Debit	Credit
Factory 1	Accounts PayableCashFactory OverheadMaterialsWork in Process	- Select -	- Select -
	Accounts PayableAccounts ReceivableCashFactory OverheadWork in Process	- Select -	- Select -
Factory 2	Accounts PayableAccounts ReceivableCashMaterialsWork in Process	- Select -	- Select -
	Accounts PayableAccounts ReceivableCashFactory OverheadWork in Process	- Select -	- Select -

Question Content Area

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.

Item	Amount	Debit or Credit	Underapplied or Overapplied
Factory 1	fill in the blank 1 of 2$	CreditDebit	OverappliedUnderapplied
Factory 2	fill in the blank 2 of 2$	CreditDebit	OverappliedUnderapplied