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	$1,442,000	$912,600
Estimated direct labor hours for year		25,350
Estimated machine hours for year	51,500
Actual factory overhead costs for September	$115,110	$103,210
Actual direct labor hours for September		2,820
Actual machine hours for September	4,160

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.

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.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

Now journalize the second Sep. 30 entry to apply factory overhead to production in Factory 2 for September. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

Final Question

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.

Factory 1		credit	overapplied
Factory 2		debit	overapplied