Single plantwide and Multiple production department factory overhead rate methods and product cost distortion Instructions Single Plantwide Method Multiple Production Department Method Final Questions Instructions 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 2 Testing Department Total $420,000.00 1,200,000.00 $1,620,000.00 Direct machine hours were estimated as follows: Assembly Department 3,000 hours Testing Department 6,000 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 0.8 dmh Assembly Department 1.8 dmth Testing Department 3.2 Total machine hours per unit 4.8 amh 1.6 2.4 dmth Required: A Dunormue me per-unit cachory overhoad alocanoes to the commercial and residential motors under the single plantwiodo factory overhead rate method, using direct machine hours as the allocation base b. Determine the per-unit factory overhead allocated to the commercial and residential motors under the mumple production departmerit factory rate method, using airect machine hours as the allocation base for each department c. (1) Recommend to management a product costing approach, based on your analyses in (a) and (b) (2) Give a reason for your answer ove Single plantwide and Multiple production department factory overhead rate methods and product cost distortion Instructions Single Plantwide Method Multiple Production Department Mothod Final Questions Single Plantwide Method Shaded cells have feedback. 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 Residential per unit per unit Points: 072 Feedback Check My Work Total overhead + total hours Rate Single plantwide and Multiple production department factory overhead rate methods and product cost distortion Instructions Single Plantwide Method Multiple Production Department Method Final Questions Single Plantwide Method Multiple Production Department Method Shaded coils have foedback Shaded cells have feedback. b. Determine the per-unt factory overhead allocated to the commercial and residential motors under the mutiple production department factory overhead rate method, using direct machine hours as the allocation base for each department Commercial Residential per unit per unit Points: 012 Single plantwide and Multiple production department factory overhead rate methods and product cost distortion Instructions Single Plantwilde Mathed Multiple Production Department Method Final Questions Final Questions Shaded cells have feedback c. (1) Recommend to management a product costing approach, based on your analyses in (a) and (D). (2) Give a reason for your answer. (1) Management is indifferent, since either method yields the same result. Management should change to the multiple production department factory overhead rate method. Management should continue to use the single plantwide overhead rate method Points: 0/1 (2) In this case, the multiple production department method causes cost distortion, so the single plantwide method should be used In this case, the factory overhead rates for each product are the same under other method; therefore, the company should choose single plantwice method since it's easier to Implement In this case, the single plantwido method causes cost distortion, to the multiple production department method should be used