If possible, please fill in boxes using data from pictures. Thank you! 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 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 overheadwas budgeted for Nova:Fabrication Department factory overhead$430,000Assembly Department factory overhead172,000Total$602,000Direct labor hours were estimated as follows:Fabrication Department4,300 hoursAssembly Department4,300Total8,600 hoursIn addition, the direct labor hours (dlh) used to produce a unit of each product in each department were determined fromengineering records, as follows: Production DepartmentsGasoline Engine Diesel EngineFabrication Department1.20 dlh2.80 dlhAssembly Department2.801.20Direct labor hours per unit4.00 dlh4.00 dlha. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the single plantwide factoryoverhead rate method, using direct labor hours as the activity base.Gasoline engine $per unitDiesel engineper unitb. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the multiple productiondepartment factory overhead rate method, using direct labor hours as the activity base for each department.Gasoline engine$4per unitDiesel engineper unit

Formula: Predetermined overhead rate = Total estimated overhead cost / Total estimated Direct labor…

The management of Nova 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 Nova: Fabrication Department factory overhead $430,000 Assembly Department factory overhead 172,000 Total $602,000

The management of Nova 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 Nova: Fabrication Department factory overhead $430,000 Assembly Department factory overhead 172,000 Total $602,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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