Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion Pineapple 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 Pineapple: Assembly Department $207,200 Testing Department 791,800 Total $999,000 Direct machine hours were estimated as follows: Assembly Department Testing Department 3,700 hours 7,400 Total 11,100 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 0.50 dmh 1.00 dmh Assembly Department Testing Department 1.00 2.00 Total machine hours per unit 1.50 dmh 3.00 dmh a. Determine the per-unit factory overhead allocated to the Commercial and Residential motors under the single plantwide factory overhead rate method, using direct machine hours as the allocation base. Commercial Motor per unit per unit Residential Motor 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 Motor per unit Residential Motor per unit C. Recommend to management a product costing approach, based on your analyses in (a) and (b). The factory overhead determined under the single plantwide factory overhead rate and multiple production department factory overhead rate methods are machine hours used by each product from the two departments is . However, the two production department overhead rates are the easier rate method in this situation. This is because the ratio of direct . Thus, Peach should consider