Factory Overhesd Rates and Account Balances Prostheses Industries operates two factories. The manufacturing operations of Factory 1 are in intensive, while the manufacturing operations of Factory 2 are labor intensive. 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: a. Determine the factory overhead rate for Factory 1. Round your answer to the nearest cent. 3 per machine hour b. Determine the foctory overhesd rate for Factory 2. Round your answer to the nearest cent. 1 per direct labor hour factory overhead. e. Explain why Factory 1 uses machine hours to allocate factory overhead while Factory 2 uses direct labor hours. Factory overhead should be allocated using a base that is related to (causes) the overhead costs incurred. Factory 1 has a manufacturing operation, and Factory 2 has a manufacturing operation. Thus, Factory 1 uses machine hours, and Factory 2 uses direct labor hours to allocate factory overhead. Fetdtiec. Toeck Wy Wh a. Divide the estimated factory overhead by the estimated machine hours (Foctory 1 ). b. Divide the estimated factory overhead by the estimated direct lobor hours (Factory 2)