Single Plantwide Factory Overhead Fate Scrumptious Snacks Inc. manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The company has budpeted the following costs for the upcoming period: Factory overhead is allocated to the three products on the basis of processing hours. The products had the following production budget and processing hours per case: If required, round all per-case answers to the nearest cent. A. netermine the cinale nlantwidn factorv overhead rate Factory overhead is allocated to the three products on the basis of processing hours. The products had the following production budpet and processing hours per case: If required, round all per-case answers to the nearest cent. a. Determine the single plantwide factory overhead rate. \&. per processing hour b. Use the overhead rate in (a) to determine the amount of total and per-case overhead allocated to each of the three products under generally accepted accounting principles. Multiple Production Department Factory Overhead Rate Method Handy Leather, Inc, produces three sizes of sports gloves: small, medium, and large. A glove pattern is first stenciled onto leather in the Pattern Department. The stenciled pattems are then sent to the Cut and sew Department, where the glove is cut and sewed together. Handy Leather use, the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows: The direct labor estimated for each production department was as follows: Direct laber hours are used to allocate the production department overhead to the products. The direct labor hours per unit for each product for each production department were obtained from the engineering records as follows: If required, round all per unit answers to the nearest cent. The direct bbor estimbled for each produckon departiment was as follows: Direct labor hours are used to allocate the production department overhead to the products. The direct labor hours per unit for each product for each production department were obtained from the engineering records as foliowst If required, round all per unit answers to the nearest cent. Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion The management of Nowa Indestries Inc. manufactures gasolinn and diesel engines through two production departments, Fabrication and Assembly, Management needs accurate product cost information in order to guide product strategy. Presently, the cornpany uses a single plantwide factory overhead rate for allecating factory overhead to the two products However, raanagement is considering the inuaigle production department factory overhead rate method. The following factory overthead was budgeted for Nova: Direct labor hours were estimated as follows: If addition, the direct labor hours (dih) used to produce a unit of each product in each departmont were determined from engineering records. is follows: In addition, the direct labor hours (dlb) used to produce a unit of each product in each department were dotermined from engineering records, as follows: a. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the single plantwide factory overhead rate method, using direct labor hours as the activity base. b. Determine the per-tinit factory overhead allocated to the gasoline and diesel engines under the multiple production department factory overhead rate method, using direct labor hours as the activity base for each department. Gasoline engine per unit Diestel engine per unit c. Recommend to management a product costino approach, based on your analyses in (a) and (b). Management should select the factory overhead rate method of allocating overhesd costs; The factory overhead rate method indicates that both products have the same factory overhead per unit. Each product uses the direct labor hours Thus, the rate method avoids the cost distortions by accounting for the averhead Single Pfantwide and Multiple Production Department factory Overhead Rate Methods and Product Cost Distortion Eclipse Motor Company manufactures two types of specialty electric moters a cormercial motor and a residential motor, threugh two production departments, Assembly and Testing. Presently, the company uses a single plantwide factory averhead rato for allocating factory overhead to the two products. However, management is considering using the multiple production department factory overhead rate method. The following factory overtiead was budgeted for Ecipse: Direct machine hours were estimated as follows: 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! In addibon, the direct machine hours (dmh) used to produce a unit of each product in each department were determined from engineening records, as followst 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. costin Heside b. Determine the per-unit factory overhead allocated to the commercial and residential motors under the multiple production departrment factory overhead rate method, using direct machine hours as the allocation base for each department. Commercial \& per unit c. Recommend to management a product costing approach, based en your analyses in (a) and (b). 1. The management should convider multiple production department factory overhead rate methods, because the mathod calculates the cogt more accurately and considers the fact that cocmmercial products use more costly overheads than residential products. 2. The manadenhent shauld consider single plantwide factory overhead rate methods, because this method calculates the cost more accurately and conslders the fact that the oyerheads are applied evenly based on the direct labor hours. 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 4 per unit b. Determine the per-unit factory oyerhead 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 aach department. Commercial 5 per unit c. Recornmend to management a product costing approach, based on your analyses in (a) and (b). 1. 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 use more costly overheads than residential products. 2. The management should consider single plantwide factory overhead rate methods, because this method calculates the cost more accurately and considers the fact that the overheads are applied evenly based on the direct labor hours. 3. The management could consider either multiple production department factory overhead rate method or the single plantwide fate, as both these methods have the same effect on the final costsi Click to watch the Tell Me More Learning Objective 6 video and then answer the questions below. 1. Which of the following activities is identified with a service business? a. Fabrication b. Diagnostic imaging c. Assembly d. Mixing 2. Jacobsville Hospital has budgeted costs of $850,000 in diagnostic imaging. The total estimated activity-based usage is 2,500 images. Total costs for the entire hospital are estimated to be $3,000,000. The activity rate per image is a. $340