Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion The management of Fireboilt 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 plant ide factory overhead rate or allocating factory overhead to the two products. However, management 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 $360,000 144,000 $504,000 Total Direct labor hours were estimated as follows: 3,600 hours 3,600 7,200 hours Fabrication Department Assembly Department 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 Production DepartmentsGasoline Engine Diesel Engine Fabrication Department Assembly Department Direct labor hours per unit 0.90 dih 2.10 3.00 dih 2.30 dih 0.70 3.00 dih