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: 577,200.00 Fabricatlon Department factory overhead 35,200.00 2 Assembly Department factory overhead $812,400.00 Total Direct labor hours were estimated as follows: Fabrication Department 5,200 hours Assembly Department 4,900 10,100 hours Total 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 Departments Gasoline Engine Diesel Engine Fabrication Department2.8 dlh 1.9 dlh Assembly Department 1.9 2.8 .7 dlh Direct labor hours per unit 4.7 dlh Required: a. Defermine the per-uvit factovry overhead allocated to the gasoline and diesel engines under the single plantwide factory overhead rate method using direct labor hours as the actiwty base. b. Defermine the per-unit factory overhead allocated to the gasoline and diesel engines under the muitiple production department factary overhead rate method, using direct labor hours as the activity base for each department 1 Re om mend to management a product cos ng approach based on your analyses in a) and b 2) c ve a reason r your answer If required, round all per-unit answers to the nearest cent. iPlantwide Method a Determine the per-unit factory overhead aliocated to the gasoline and diesel engines under the single planwide factory overhead rate method, using direct labor hours as the activity base If required, round all per-direct labor hours and per-unit answers to the nearest cet Gasoline engine S per unit Diesel engine S per unit Multiple Production Department Method b. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the muiltiple production department factory overhead rate method, using divect labor hours as the activity base for each department if required, round al per-unit answers to the nearest cent Gasoline engine $ per unit Diesel engine $ per unit Recommend to management a product costing approach, based on your analyses in (a) and (b) (2) Give a reason for your answer OManagement is indifferent, since either method yields the same result O Management should continue to use the single plantwide overhead rate method. O Management should change to the multiple production department factory overhead rate methoo O In this case, the multiple production department method causes cost distortion, so the single plantwide method should be used O In this case, the factory overhead rates for each product are the same under either method: therefore, the company should choose single plantwide method since it's easier to implement. In this case, the single plantwide method causes cost distortion, so the multiple production department method should be used