Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion The management of Nova 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 plantwide factory overhead rate for allocating factory overhead to the two products However, manogement is considering the multiple production department factory overhead rate method, The following factory overhead was budgeted for Nova: Oirect laber hours were estimated as follows: In addition, the direct labor hours (h) used to produce a unit of esch product in each department were determined from engineering records, as follows: a. Determine the perunit factory overhead allocated to the gasoline and diesel engines under the single plantwide factory overhead rote method, using direct labor hours In addition, the direct labor hours (dih) used to produce a unit of esch product in esch department were determined from engineering records, as follows: a. Determine the per-unit factory overheod allocated to the gasoline and diesel engines under the single plantwide factory overhead rate method, using direct labor hour as the activity base. Gasoline engine per unit Dieset engine per unit b. Determine the per-unit tactory overhead allocated to the gasoline and diesel engines under the multiple production department factory averhead rate method, using direct labor hours as the activity base for each department. Gasoline engine Diesel engine c. Flecommend to management a product costing approach, based on your analyses in (a) and (b). Mansgement should select the tactory overtiead rate method of allocating overhead costs. The factory overtiesd rate method indicates that both products have the same factory overhead per unit. Each product uses the direct laboe hours Thus, the rate method avolas the cost distorticns by accounting for the overhesd