Answer and Explanation:
The computation is shown below:
a. Factory overhead rate for Factory 1 is
= Estimated factory overhead cost ÷ Estimated machine hours for the year
= $1,516,700 ÷ 52,300
= $29
b. Factory overhead rate for Factory 2 is
= Estimated factory overhead cost ÷ Estimated direct labor hours for the year
= $1,074,600 ÷ 29,850
= $36
c. The journal entry is shown below:-
1. Work in process Dr, $126,150 (4,350 × $29)
To Factory overhead $126,150
(To record the factory overhead)
2. Work in process Dr, $97,200 (2700 × $36)
To Factory overhead $97,200
(To record the factory overhead)
d. The balance of the factory overhead amounts for each factory as follows:
For Factory 1
= $124,880 - $126,150
= $1,270 Credit Overapplied
For Factory 2
= $98,910 - $97,200
= $1,710 Debit Underapplied
