1 Single plantwide and multiple production department factory overhead rate methods and product cost distortionThe management of Nova Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information inorder 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 multipleproduction department factory overhead rate method. The following factory overhead was budgeted for Nova:Fabrication Department factory overheadAssembly Department factory overheadTotalDirect labor hours were estimated as follows:Fabrication DepartmentAssembly DepartmentTotal$440,000200,000$640,0004,000 hours4,0008,000 hoursIn 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 DepartmentsGasoline EngineDiesel EngineFabrication Department6.0 dlh4.0 dlh4.06.0Assembly DepartmentDirect labor hours per unit10.0 dlhper unitper unit10.0 dlha. 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.Gasoline engine $per unitDiesel engine $per unitb. 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 foreach department.Gasoline engine $Diesel engine $

Name: 1 Single plantwide and multiple production department factory overhead
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: 1 Single plantwide and multiple production department factory overhead rate methods and product cost distortionThe management of Nova Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembl