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Instructors The management of Fireboit Industries the manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs acturate product cost information in order to guide product strategy Presently, the company uses a single plantwide factory overhead rate for alocating taclory overhead to the two products. However, management as considering the multiple production department factory overhead rate method. The following factory overhead was budgeted for Firebot Fabrication Department factory overtad by Department factory overhead 5577.200.00 235.200.00 1 5112,400.00 Direct labor hours were estimated as follows: Fabrication Department 5.200 hours Assembly Department 4.900 Total 10,100 hours In addition, the direct aber hours (an) uned to produce a unit of each product in each department were determined from engineering records, as fotows Production Departments Gasoline Engine Diesel Engine Fabion Department 230 10 din Instructors Vuos Gasoline Enge SUTEN Fabrication Department 28 dih 1.9dth Assembly Department 1.9 28 Direct labor hours per unit 47 din 4.70 Required: a Determine the per-unt factory overhead alocated to the gasoline and diesel engines under the single plantvide factory overhead rate method using direct labor hours as the activitate b. Determine the per-unt factory overhead alocated to the gasoline and deal angines under the mutile production department factory overhead rate method, using direct labor hours as the activity base for each department 6 M) Recommend to marragement a product casting approach, based on your analyses in (a) and (b) (2) Give reason for your answer the activity.820. If required, round al per direct labor hours and per-unit answers to the nearest cont Gasoline engine s per unit Diesel engines Der unit Points 012 Foosbach Check My Work Total budgeted overhead-total hours Rato Product costs Ratex Labor hours for each product Multiple Prochaction Department Method Shaded cels have feedbac 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-unt answers to the nearest cent Gasoline engine per unit Diesel engines Der unit Points 072 Feedback Check My Works Department rate Department overhead - Labor hours Product allocation Labor hours per product Department rate,Add both department locations together to obtain a total per product c. (1) Recommend to management a product costing approach, based on your analyses in (a) and (b). (2) Give a reason for your answer (1) Management should continue to use the single plantwide overhead rate method Management is indifferent, since other method yields the same result Management should change to the mutiple production department factory overhead rate method, Point 071 02 in this case, the factory overhead rates for each product are the same under wither method, therefore, the company should choose single plantvide method since it's easier to implement In this case, the multiple production department method causes cost distortion, so the singie plantwide method should be used in the cam, the single plantwide method cautas con distortion to the multiple production department method should be used Points 0/1

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