Elliott Engines Inc. produces three products$-$pistons, valves, and cams$-$for the heavy equipment industry. Elliott

Engines has a very simple production process and product lire and uses a single plantwide factory overhead rate to

allocate overhead to the three products. The factory averhead rate is based on direct labor hours. Information about

the three products for $20Y2$ is as follows:

The estimated direct labor rate is $$25$ per direct labor hour. Beginning and ending inventories are negligible and are,

thus, assumed to be zero. The budgeted factory overhead for Elliott Engines is $$226,800.$

If required, round all per unit answers to the nearest cent.

a$.$ Determine the plantwide factory overhead rate.

$

per dih

b$.$ Determine the factory overhead and direct labor cost per unit for each product.

Direct Labor Factory Overhead Direct Labor

Hours Per Unit Cost Per Unit Cost Per Unit

c$.$ Use the information above to construct a budgeted gross profit report by product line for the year ended

December $31,20$Y$2.$ Include the gross profit as a percent of sales in the last line of your report, rounded to one

decimal place. Enter all amounts as positive numbers, except for a negative gross profit$/$gross profit percentage of

sales.

Elliot Engines Inc.

Product Line Budgeted Gross Profit Reports

For the Year Ended December $31,20Y2$

d$.$ What does the report in $($c$)$ indicate to you?