pineapple motor company manufactures two types of specialty electric motors a commer 4372803

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: Assembly Department……………………………………………. $240,000 Testing Department………………………………………………. 750,000 Total……………………………………………………………… $ 990,000 Direct machine hours were estimated as follows: Assembly Department…………………………………………… 3,000 hours Testing Department……………………………………………… 6,000 Total……………………………………………………………… 9,000 hours In addition, the direct machine hours (dmh) used to produce a unit of each product in each department were determined from engineering records, as follows: 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. c. Recommend to management a product costing approach, based on your analyses in (a) and (b). Support your recommendation. View Solution:
Pineapple Motor Company manufactures two types of specialty electric motors

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