Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion Edipse 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 edi: Assembly Department Testing Department Total $250,000 800,000 51,080,000 Direct machine hours were estimated as follows Assembly Department Teting Department Total 4,000 hours 5.000 9.000 In ton, de machine hours (ohned to producent of each product in each department were determined from engineering records, falls Commercial Mesidential 3.0 den Assembly Department Testing Department Total machine hours per unit 2.0 din 6.0 dim Determine the perictory overhead cated to the commercial and restore under the single de factory vede method using the houses the Residential Commercial 2.0 dish 0.0 Assembly Department Testing Department Total machine bours per unit 3.0 dm 115 8.0 m 4.5 dhe .. Determine the per-unit factory overhead allocated to the commercial and residential motors under the single plantwide factory overhead rate method, wing direct machine hours as the allocation base Commercial per un Redential per unit Determine the per-unit factory overhead allocated to the commercial and residential motors under the multiche production department factory overhead rate method, uning direct machine bours as the allocation base for each department Commercial Hesidential per unit per unit c. Recommend to management product costing approach based on your analyses in (a) and (b). :. 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 more costly overheads that residential products 2. The management should consider single plantede factory overhead rate methods, because this method calculates the cost more accurately and consider the fact that the overheads aped based on the derect labor hours 3. The management could consider the multiple production department factory Overhead rate method or the single antiderate both these methods have the same effect on the