Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cont Distortion Eclipse Motor Company manufactures two types of specialty electric motort, 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 budpeted for Eclipu: Assembly Department Testing Department $280,000 800,000 $1,000,000 Total Direct machine hours were estimated as follows 4,000 hours Assembly Department Testing Department 5,000 9,000 hours Total In addition, the direct machine hours (denused to produce a unit of each product in each department were determined from engineering records for Commercial 2.0 dm Residential 3.0 dmh 15 Assembly Department Testing Department 6.0 8.0 dm 4.5 min Previous Total machine hours per unit 6.0 1.5 Testing Department Total machine hours per unit 8.0 dm 45 am 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 per un Residential per unit 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 per unit Residential per unit c. Recommend to management a product costing approach, based on your analyses in (a) and (b) 1. The management should consider multiple production department factory overhead rate methods, because this method calculates the cost more accurately and considers the fact that commercial products use more costly overheads than residential products 2. The management should consider single plantwide factory overhead rate methods, because this method calculates the cast more accurately and considers the factors the overheads are applied evenly based on the direct labor hours 3. The management could consider either multiple production department factory overhead rate method or the single planta de rate, as both these methods have the same effect on the final costs.