Determine the per-unit factory overhead allocated to the gasoline and diesel engines
I need to 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-unit answers to the nearest cent.he 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:
1
Fabrication Department factory overhead
$561,600.00
2
Assembly Department factory overhead
241,500.00
3
Total
$803,100.00
Direct labor hours were estimated as follows:
Fabrication Department4,800hoursAssembly Department5,250
Total10,050hours
In 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 Department3.1 dlh1.8 dlhAssembly Department1.83.1Direct labor hours per unit4.9 dlh4.9 dlh
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