Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion

Pineapple 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 Pineapple:

Assembly Department		$213,200
Testing Department		795,400
	Total	$1,008,600

Direct machine hours were estimated as follows:

Assembly Department		4,100	hours
Testing Department		8,200
	Total	12,300	hours

In addition, the direct machine hours (dmh) used to produce a unit of each product in each department were determined from engineering records, as follows:

	Commercial		Residential
Assembly Department	0.50	dmh	1.00	dmh
Testing Department	1.00		2.00
Total machine hours per unit	1.50	dmh	3.00	dmh

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 Motor	$fill in the blank 1 per unit
Residential Motor	$fill in the blank 2 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 Motor	$fill in the blank 3 per unit
Residential Motor	$fill in the blank 4 per unit