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Set Chapte.xy.. CengageNowv2lOnlin·xeDCengage Learning ome- Students ? secure l https://v2.cengagenow.c re I https/v2.cengagenow.com/ilm/takeAssignment/takeÄssignmentMain.do?invoker- saved&itakeAssignmentSessionlocators; ? EasyKey.com Benefits OnLine a MBSDirect Operat D New Tab ps e FedEx ? Tracking S, Iron Mountain Con Staples w, dule 3: Assignment eBook Calculator sinale plantwide and Multiple production department factory overhead rate methods and product cost distortion Single Plantwide Method Multiple Production Department Method 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 Fabrication Department factory overhead Assembly Department factory overhead $455,000.00 286,200.00 741,200.00 Total

Explanation / Answer

Single plant wide factory overhead rate

= Total factory overhead ÷ Total number of units of base for the the factory

***Here the base could be anything like machine hours or Labor hours etc.. depends on management decision.

In the question, Total factory overhead = $455,000 + $286,200 = $741,200

***However it seems like, the details regarding the base are absent in the question.

Plant wide factory overhead rate = $741,200 ÷ Total number of units of base for the the factory

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