Sing Panlide od Multiple Production Destet actory overhead tate Methods and Product Cost ostortion The management of Firebolt Industries Inc., manufactures gasoline and designs through the production departments Fabrication and Atl. Management nece accurate product cost information in order to guide product strategy Present the company was a single plantwide factory overhead rot for acting factory overhead In the two product. However, management is considering the multiple production department factory overhead rate method. The following factory overhead was budgeld for Prebot Fabrication Department factory overhead Assembly Dentment factory overhand Total 5550.000 250.000 500.000 Direct bor hours were citimated as follows Fabrication Department Assembly Department Tocal 5,000 hours 5,000 10,000 hours In adation, the direct labor hours (dih) used to produce a unit of each product in each department were determined from engineering records, as follows: Production Departments Gasoline Engine Diesel Engine Fabrication Department 3.0 din 2.0 dih Assembly Department 3.0 Direct labor hours per unit 50 din 5.0 dth 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 Gasoline engine per unit Fabrication Department Assembly Department Tot 5.000 hours 5,000 10,000 hours In addition, the direct taber noor (om) used to producen a unit of each product on each department were determined from engineering records, as follows: Production Departments Gasoline Engine Diesel Engine Fabrication Department 30 din 2.0 din Assembly Department 2.0 3.0 Direct labor hours per unit 5.0 50th 3. Determine the per unit factory overhead allocated to the gasoline and engines under the single plantwide factory overhead rate method, using direct labor hours as the activity base Gasoline engine per unit Diesel engine per unit b. Determine the per unit factory overhead alocated to the gasoline and diesel engines under the multiple production department foctpry overhead rate method, using direct labor hours as the activity base for each department Gasoline engine per unit Diesel engine per unit c. Recommend to management a product costing approach, based on your analyses in (a) and (b) Management should select the factory overhead rate method of a locating overhead costs. The Factory overhead rate method indicates that both products have the same factory overhead perunt. Each product uses the direct lobor hours Thus, the rate method avoid the cost distortions by accounting for the overhead Check My Work