Assignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false eBook Single Plantwide and Multiple Production Department Factory Overnead Rate methods and Product Cost Distortion Eclipse Motor Company manufactures two types of specialty electric motors, a commercial motor and a residential motor, through two production departments, Assembly and Testing. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering using the multiple production department factory overhead rate method. The following factory overhead was budgeted for Eclipse Assembly Department Testing Department Total $280,000 800,000 $1,080,000 Direct machine hours were estimated as follows: Assembly Department Testing Department 4,000 hours 5,000 Total 9,000 hours In addition, the direct machine hours (dmh) used to produce a unit of each product in each department were determined from engineering records, as follows: Commercial Residential 3.0 dmh 2.0 dm Assembly Department Testing Department Total machine hours per unit 6.0 1.5 8.0 dmh 4.5 dmh Previous Next > Check My Work Save and Exit Submit Assignment for Grading All work saved ngaporICIC ooo Total 9,000 hours In addition, the direct machine hours (dmh) used to produce a unit of each product in each department were determined from engineering records, as follows: Commercial Residential 2.0 dmh Assembly Department Testing Department 3.0 dmh 6.0 1.5 Total machine hours per unit 8.0 dmh 4.5 dmh a. Determine the per-unit factory overhead allocated to the commercial and residential motors under the single plantwide factory overhead rate method, using dire machine hours as the allocation base. Commercial 240 X per unit Residential 360 X per unit b. Determine the per-unit factory overhead allocated to the commercial and residential motors under the multiple production department factory overhead rate method, using direct machine hours as the allocation base for each department. Commercial 60 X per unit Residential 160 X per unit c. Recommend to management a product costing approach, based on your analyses in (a) and (b). 1. The management should consider multiple production department factory overhead rate methods, because this method calculates the cost more accurately and considers the fact that commercial products use more costly overheads than residential products, Check My Work Previous Next All work saved Save and Exit Submit Assignment for Grading