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Tiny Biggs Company operates two factories. The company applies factory overhead to jobs on the basis of machine hours in Factory 1 and on the
Tiny Biggs 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 September 1 | $1,337,500 | $847,000 |
Estimated direct labor hours for year | 24,200 | |
Estimated machine hours for year | 53,500 | |
Actual factory overhead costs for September | $108,410 | $96,900 |
Actual direct labor hours for September | 2,720 | |
Actual machine hours for September | 4,400 |
Required:
A. | Determine the factory overhead rate for Factory 1. |
B. | Determine the factory overhead rate for Factory 2. |
C. | Journalize the Sep. 30 entries to apply factory overhead to production in each factory for September. Refer to the Chart of Accounts for exact wording of account titles. |
D. | Determine the balances of the factory overhead accounts for each factory as of September 30, and indicate whether the amounts represent overapplied factory overhead or underapplied factory overhead. |
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