Please show calculations Pineapple Motor Company manufactures two types of speci

Question

Please show calculations

Pineapple Motor Company manufactures two types of specialty electric motors, a commercial motor and a residential motor, through two production departments, Assembly and Testing. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering using the multiple production department factory overhead rate method. The following factory overhead was budgeted for Pineapple:

a. Determine the per-unit factory overhead allocated to the Commercial and Residential motors under the single plantwide factory overhead rate method, using direct machine hours as the allocation base.

b. Determine the per-unit factory overhead allocated to the Commercial and Residential motors under the multiple production department factory overhead rate method, using direct machine hours as the allocation base for each department.

Sh.. Our Animals- An.. Home3 a Amazon.com: Bag Pineapple Motor Company manufactures two types of specialty electric motors, a commercial motor and a residential motor, through two product and Testing. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However,s using the multiple production department factory overhead rate method. The following factory overhead was budgeted for Pineapple Assembly Department Testing Department 215,000 817,000 $1,032,000 Total Direct machine hours were estimated as folllows Assembly Department Testing Department 4,300 hours 8,600 12,900 hours Total ? ) In addition, the direct machine hours (dmh) used to produce a unit of each product in each department were determined from engineering records as , Commercial Residential Assembly Department Testing Department Total machine hours per unit a. Determine the per-unit factory overhead allocated to the Commercial and Residential motors under the single plantwide factory overhead rate metho 0.50 dmh 1.00 dmh 1.00 150 dmh 3.00 dmh 2.00 machine hours as the allocation base. Commercial Motor per unit per unit Previc Check My Work work saved. 8 6 4 0

Explanation / Answer

Solution a:

Predetermined overhead rate using plant wide overhead rate method = Estimated overhead / Estimated machine hours

= $1,032,000 / 12900 = $80 per hour

Solution b:

Solution c:

The factory overhead determined under single plantwide factory overhead rate and multiple production department factory overhead rate are same. This is beacuse the ration of machine hours used by each product from the two departments is same. However departmental overhead rates are more reliable method for allocation of overhead.

Computation of per unit factory overhead allocation Particulars Commercial Residential Total machine hours 1.50 3.00 Overhead rate $80.00 $80.00 Per unit factory overhead $120.00 $240.00

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