Homework SourseThe 2nd timeI just need the answers Please round to the near
The 2nd time...****I just need the answers. Please round to the nearest cent****** Look at the numbers provided.
The 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
$636,650.00
2
Assembly Department factory overhead
243,000.00
3
Total
$879,650.00
Direct labor hours were estimated as follows:
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:
*If required, round all per-unit answers to the nearest cent
Single plantwide Method:
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 . If required, round all per-direct labor hours and per-unit answers to the nearest cent.
Multiple production department method:
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.
| 1 | Fabrication Department factory overhead | $636,650.00 |
| 2 | Assembly Department factory overhead | 243,000.00 |
| 3 | Total | $879,650.00 |
Solution
A) PER UNIT FACTORY OVERHEAD USING SINGLE PLANTWIDE FACTORY OVERHEAD RATE
TOTAL COST 879650
TOTAL LABOUR HOUR 10750
TO PRODUCE A SINGLE UNIT 4.8 DLH IS REQUIRED IN GASOLINE ENGINE AND 4.8 DLH IN DIESEL ENGINE.
IT MEANS TOTAL NUMBER OF UNIT PRODUCED IS 10750 4.8+4.8
= 1120 UNITS.
PER UNIT COST IS 879650 1120
= $785.40
PER UNIT COST OF GASOLINE ENGINE=785.40*4.8 =392.70 9.6
PER UNIT COST OF DIESEL ENGINE =785.40*4.8 =392.70 9.6
PER UNIT COST UNDER MULTIPLE PRODUCTION DEPARTMENT FACTORY OVERHEAD RATE
COST UNDER FABRIC DEPARTMENT.
GASOLINE ENGINE=392.70*2.9 =237.26 4.8
DIESEL ENGINE =392.70*1.9 =155.44 4.8
COST UNDER ASSEMBLY DEPARTMENT
GASOLINE ENGINE =392.70*1.9 = 155.44 4.8
DIESEL ENGINE =392.70*2.9 = 237.26 4.8
