Edipse Motor Company manufactures two types

$\backslash$table$[[$Assembly Department,$$280,000$

factory overhead to two products. However, management the factory overhead rate method. overhead two of electr,c motors, a commercial motor and a motor. through two departments. Assembly and Test,ng. Presently. the uses a Total mrect machme hours were estimated as follows: Assembly Department 4,000 hours Vesting Department 5,000 Total 9,000 hours In the d,rect machine hours (dmh) used to produce a unit of each product in each department were deterrn,ned from records, as follows: Commercia I Residen Assembly Department Testing Department Total machine hours per unit 2.0 drnh 6.0 8.0 dmh J.O drnh 1.5 4.5 drnh . Determine the per-unit factory overhead allocated to the and residential motors under the plantwide overhead rate method. as the base. Commercial X per u rut tlal per unit . Determine the per.un,t factory overhead allocated to the commercaal and residential motors under the multiple production department factory overhead rate machine as the allocation base for each department. :ornrnercial estdentia/ per unit per unit Recommend to management a product costing approach, based on your analyses in (a) and The management should consider multiple production department factory overhead rate methods, because t hrs rnethod calculates the cost rmre accurately and considers the fact that cornmeraal products use more costly overheads than pcmjucts. The management should consider single plantwide factory overhead rate methods, because this method calculates the cost more accurately and considers the fact that the overheads are applied evenw based the &rect labor hours. management could consider either multiple production department factory overhead rate method or the Single plantwide rate, as both these methods have the same effect on the final costs.