Journal Entry

Alabama Company operates two factories. Factory 1 applies factory overhead to jobs on the basis of machine hours; Factory 2 applies factory overhead to jobs on the basis of direct labor hours. Factory 1 Factory 2 Estimated factory overhead cost for upcoming year $270,000 $235,000 Estimated direct labor hours for the year 9,400 hours Estimated machine hours for the year 15,000 hours Actual factory overhead costs for the year $21,900 $19,400 Actual direct labor hours for March 770 hours Actual machine hours for March 1,260 hours 1. Determine the factory overhead rate for each factory 2. Journalize the entries to apply factory overhead to production in each factory for March. 3. Determine the balances of the factory overhead accounts for each factory for March. Indicate whether the amounts represent overapplied or underapplied factory overhead. 4. Make the journal entry for each factory to reconcile the underapplied or overapplied overhead to Cost of Goods Sold