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1Fabrication Department factory overhead = $614,800.00

2Assembly Department factory overhead =

246,750.00

3Total = $861,550.00


Direct labor hours were estimated as follows:

Fabrication Department = 5,300 hours

Assembly Department = 5,250 hours

Total = 10,550 hours


Production Departments Gasoline Engine Diesel Engine

Fabrication Department 2.9 dlh 1.8 dlh

Assembly Department 1.82 .9

Direct labor hours per unit 4.7 dlh 4.7 dlh




*a.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.


*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.


*c.(1) Recommend to management a product costing approach, based on your analyses in (a) and (b). (2) Give a reason for your answer.*If required, round all per-unit answers to the nearest cent.

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