5 3 The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production department factory overhead rate method. Estimated MOH: Estimated Direct labor hours: hour Fabrication Department Assembly Department $430,000 172,000 Total $602,000 Total Fabrication Department 4,300 S Assembly Department 4,300 8,600 hour S Direct labor hours (DLH) used to produce a unit of each product in each department were determined from engineering records: Gasoline Engine Diesel Engine 2.8 DLH Fabrication Production Department Department Assembly S Department Direct labor hours per unit 1 DLH 3 DLH 1.2 DLH 4 DLH 4 DLH a. 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. 5 POHR Estimated MOH /DLH Estimated Base 3 Gasoline Engines /DLH * , DLH/unit /unit Diesel Engines /DLH DLH/unit /unit b. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the multiple production 7 department factory overhead rate method, using direct labor hours as the activity base for each department. 3 9 POHR = Fabrication Department /DLH DLH Gasoline Engines * 4 5 Diesel Engines * 3. /unit + /unit + Assembly Department /DLH DLH * * /unit /unit /unit /unit