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	$1,456,000	$954,000
Estimated direct labor hours for year		26,500
Estimated machine hours for year	52,000
Actual factory overhead costs for September	$117,600	$102,350
Actual direct labor hours for September		2,795
Actual machine hours for September	4,250

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 The amount of factory overhead applied in excess of the actual factory overhead costs incurred for production during a period. or underapplied factory overhead The amount of actual factory overhead in excess of the factory overhead applied to production during a period. .

none

X

Chart of Accounts

General Ledger

	ASSETS
110	Cash
121	Accounts Receivable
125	Notes Receivable
126	Interest Receivable
131	Materials
132	Work in Process
133	Factory Overhead
134	Finished Goods
141	Supplies
142	Prepaid Insurance
143	Prepaid Expenses
181	Land
191	Factory
192	Accumulated Depreciation-Factory

	LIABILITIES
210	Accounts Payable
221	Utilities Payable
231	Notes Payable
236	Interest Payable
241	Lease Payable
251	Wages Payable
252	Consultant Fees Payable

	EQUITY
311	Common Stock
340	Retained Earnings
351	Dividends
390	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
520	Wages Expense
531	Selling Expenses
532	Insurance Expense
533	Utilities Expense
534	Office Supplies Expense
540	Administrative Expenses
560	Depreciation Expense-Factory
590	Miscellaneous Expense
710	Interest Expense

Factory Overhead Rates

A. Determine the factory overhead rate for Factory 1.

___________per machine hour

B. Determine the factory overhead rate for Factory 2.

__________per direct labor hour

Journal

C. Journalize the Sep. 30 entry to apply factory overhead to production in Factory 1 for September. Refer to the Chart of Accounts for exact wording of account titles. Scroll down to record the entry for Factory 2.

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.

The amount of actual factory overhead in excess of the factory overhead applied to production during a period.