Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion The mansgement of Firebolt Industries Inc manufactures gasoline and diesel engines through two production departments, Fabricaton and Assembly. Management needs accurate eare management i, nie drang tr mimo e plant ide factory overhead at for allocating fotory overneed to rin mo produce som e company uses a sin budgeted for Firebolt: $550,000 250,000 $800,000 Fabrication Department factory cverhead Assembly Department factory overhead Total Direct labor hours were estimated as follows 5,000 hours 5,000 10,000 hours Fabrication Department Assembly Department Total In addtion, the direct labor hours (dlh) used to produce a unit of each product in each department were determined from engineering records, as follows: Production Departments Gasoline Engine Diesel Engine 3.0 dih 2.0 5.0 dih 2.0 dih 3.0 5.0 aih Assembly Department Direct lborhours per unt.o 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 bas Gasoline engine per unit Diesel engine per unit b. Determine the per-unit factory overhead alilocated to the gasoline and diesel engines under the multiple production department factory overhead rate method, using direct laber hours as th Gasoine engne Diesel engine e, Recommend to man,agementproduct costing approach, based on your analyses in (a) and (b) Management should select the probuct uses the direct labor hours per unit per unit factory overhead rate method of allocating overhead costs. The Thus, the rate method avoids the cost distortions by accounting for the overhead factory overhead rate method indicates that both pr