Factory Overhead Rates, Entries, and Account Balance

Montenegro Metal 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 March $1$ $$710,980$ $$694,400$

Estimated direct labor hours for year $11,200$

Estimated machine hours for year $18,710$

Actual factory overhead costs for March $$56,870$ $$60,120$

Actual direct labor hours for March $1,010$

Actual machine hours for March $1,460$

Question Content Area

a$.$ Determine the factory overhead rate for Factory $1.$

$fill in the blank $3$d$3$e$6$af$0$ef$8704$c$\_1$

$38$

per machine hour

b$.$ Determine the factory overhead rate for Factory $2.$

$fill in the blank $3$d$3$e$6$af$0$ef$8704$c$\_2$

$62$

per direct labor hour

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Question Content Area

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

Factory $1$

Work in Process

$56,870$

Factory Overhead

$56,870$

Factory $2$

Work in Process

$60,120$

Factory Overhead

$60,120$

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c$.$ Increase the work in process and reduce the factory overhead.

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d$.$ Determine the balances of the factory overhead accounts for each factory as of March $31$ and indicate whether the amounts represent overapplied factory overhead or underapplied factory overhead.

Factory $1$ $fill in the blank bf$7928$f$58012$fa$0\_1$

$62,519\mathrm{.}30$

Debit

Underapplied

Factory $2$ $fill in the blank bf$7928$f$58012$fa$0\_4$

$2,399\mathrm{.}30$

Credit

Overapplied