11 O, 23 8. Diesel engine. The management of Firebolt Industries Inc., manufactures gasoline and diesel engines the two production departments, Fabrication and Assembly. Management needs accurate produs cost information in order to guide product strategy. Presently, the company uses a management is considering the multiple production department factory overhead rate mehel plantwide factory overhead rate for allocating factory overhead to the two products. How EX 18-7 Single plantwide and multiple production department factory overhead rate methods and product cost distortion $370 per unit The following factory overhead was budgeted for Firebolt: Fabrication Department factory overhead $550,000 Assembly Department factory overhead 250,000 Total $800,000 Direct labor hours were estimated as follows: Fabrication Department 5,000 hours Assembly Department 5,000 Total 10,000 hours In addition, the direct labor hours (dlh) used to produce a unit of each product in ea department were determined from engineering records, as follows: 921 20 3.0 A. Chapter 18 Activity Based Costing Production Departments Gasoline Engine Diesel Engine Fabrication Department 3.0 din 2.0 din Assembly Department Direct labor hours per unit 5.0 dih 5.0 dih Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the single plantwide factory overhead rate method, using direct labor hours as the activity base. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the multiple production department factory overhead rate method, using direct labor hours as the activity base for each department. Recommend to management a product costing approach, based on your analyses in (A) and (B). Support your recommendation. B. C