Question:
Staten Island Turbine 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 May 1
|
$236,800
|
$118,300
|
|
Estimated direct labor hours for year
|
|
9,100
|
|
Estimated machine hours for year
|
12,800
|
|
|
Actual factory overhead costs for May
|
$23,200
|
$11,625
|
|
Actual direct labor hours for May
|
|
885
|
|
Actual machine hours for May
|
1,270
|
|
a. Determine the factory overhead rate for Factory 1.
b. Determine the factory overhead rate for Factory 2.
c. Journalize the entries to apply factory overhead to production in each factory for May.
d. Determine the balances of the factory accounts for each factory as of May 31, and indicate whether the amounts represent overapplied or underapplied factory overhead.