Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in

The management of Firebolt 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, management is considering the multiple production department factory overhead rate method. The following factory overhead was budgeted for Firebolt:

1

Fabrication Department factory overhead

$571,200.00

2

Assembly Department factory overhead

253,000.00

3

Total

$824,200.00

Direct labor hours were estimated as follows:

Fabrication Department

5,100

hours

Assembly Department

4,600

Total

9,700

Hours

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:

Production Departments

Fabrication Department

Gasoline Engine. 2.8 dlh

Diesel Engine. 2.2 dlh

Assembly Department

Gasoline Engine. 2.2

Diesel Engine. 2.8

Direct labor hours per unit

Gasoline Engine. 5.0 dlh

Diesel Engine. 5.0 dlh

Single plantwide method

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 theactivity base. If required, round all per-direct labor hours and per-unit answers to the nearest cent.

Gasoline engine______per unit

Diesel engine. ______per unit

Multiplant Production method

b. Determine the per-unit 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. If required, round all per-unit answers to the nearest cent.

Gasoline engine_____per unit

Diesel engine. _____per unit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Psychology Applied To Teaching

Authors: Jack Snowman, Rick McCown

14th Edition

1285734556, 9781285734552

More Books

Students also viewed these Accounting questions

Question

2. Find five metaphors for communication.

Answered: 1 week ago