Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production department factory overhead rate method. The following factory overhead was budgeted for Firebolt: Fabrication Department factory overhead Assembly Department factory overhead Total $550,000 250,000 $800,000 Direct labor hours were estimated as follows: Fabrication Department 5,000 hours 5,000 Assembly Department Total 10,000 hours In addition, the direct labor hours (dih) used to produce a unit of each product in each department were determined from engineering records, as follows: ima Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production department factory overhead rate method. The following factory overhead was budgeted for Firebolt: Fabrication Department factory overhead Assembly Department factory overhead Total $550,000 250,000 $800,000 Direct labor hours were estimated as follows: Fabrication Department 5,000 hours 5,000 Assembly Department Total 10,000 hours In addition, the direct labor hours (dih) used to produce a unit of each product in each department were determined from engineering records, as follows: ima