Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Diatortion Fabncation Department factory overhead Assembiy Department factory overhead Total Direct labor hours were estimated as follows: Fabncotion Department Assembly Department Total [5494","000],[190","000],[5684","000] 3,800 hours 3,800 hours In addition, the direct labor hours (dhh) used to produce a unit of each product in each department were determined from engineering records, as follows: Production Departments Gasoline Engine Diesel Engine Fabrication Department 1.20 dih 2.80 dih Assembly Department 2.80 1.20 Direct labor hours per unit dih Gasoline engine s per unit Diesel engine per unit Gasoline engine s per unit. Diesel engine per unit c. Recomm

Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion In addition, the direct labor hours (dlh) used to produce a unit of each product in each department were determined from engineering records, as follows: Gasoline engine $ Diesel engine per unit Gasoline engine $ per unit Diesel engine per unit c. Recommend to management a product costing approach, based on your analyses in (a) and (b). Management should select the direct labor hours factory overhead rate method of allocating overhead costs. The rate method avoids the cost distortions by accounting for the overhead . Thus, the factory overhead rate method indicates that both products have the same factory overhead per unit. Each product uses the . Thus, the accounting for the overhead