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Sundance Solar 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 March 1	$1,504,500	$914,400
Estimated direct labor hours for year		25,400
Estimated machine hours for year	50,150
Actual factory overhead costs for March	$121,580	$107,200
Actual direct labor hours for March		2,930
Actual machine hours for March	4,100

Required:

A.	Determine the factory overhead rate for Factory 1.
B.	Determine the factory overhead rate for Factory 2.
C.	Journalize the Mar. 31 entries to apply factory overhead to production in each factory for March. 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 March 31 and indicate whether the amounts represent overapplied factory overhead or underapplied factory overhead. Enter your answer as a positive number.

Chart of Accounts

CHART OF ACCOUNTS
Sundance Solar Company
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 Mar. 31 entry to apply factory overhead to production in Factory 1 for March. Refer to the Chart of Accounts for exact wording of account titles. Scroll down to record the entry for Factory 2.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2

Now journalize the second Mar. 31 entry to apply factory overhead to production in Factory 2 for March. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2

Final Question

D. Determine the balances of the factory overhead accounts for each factory as of March 31 and indicate whether the amounts represent overapplied factory overhead or underapplied factory overhead. Enter your answer as a positive number.

Factory 1
Factory 2

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