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Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion plantwide factory Pincapple Motor Company manufactures two types of specialty electric motors, a commercial motor and a residential motor, through tw overhead rate t production departments, Assembly and Testing. Presently, the company uses allgcating factory overhead t the two products, However, management is considering using the multiple production department factory overhead rate method, The following factory overhead was budgeted for Pineapple: Assembly $213,200 Department Testing 820,000 Department $1,033,200 Tata follows: Direct machine haurs were estimated Assembly 4,100 hours Department Testing 8,200 Department 12.300 hpurs Tata n addition, the direct machine hours (dmh) used produce a unit of each product in each department were determined from engineering records, as follows: Commercial Residential Assembly 0.50 dmh 1.00 dmh Department Testing 1.00 2.00 Department Total machine 1.50 dmh 3.00 dmh hours per unit _ the Commercial and Residential motors under the single plantwide factory overhead rate method, using direct machine hours as the allocation base. a. Determine the per-unit factory overhead allocated Commercial Motor 126 per unit 252 Residential ne Motor init b. Detemine the per-unit factory overhead allocated to the Commercial and Residential motars under the multiple production department factory overhead rate method, using direct machine hours as the allacation base for each department Commercial Motor unit Residential pen Motor unit c. Recommend to management a product costing approach, based on your analyses in (a) and (b). The factory overhead determined under the single plantwide factory overhead rate and multiple productian department factory overhead rate methods are This is because the ratin. direct machine hours used by each Thus, Peach should consider he easier product from the two departments is However, the two production department overhead rates are rate method in this situation

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