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Answer Of Q.no.3 Firebolt Industries Inc

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Q.No.3 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 $455,000.00 2 Assembly Department factory overhead 286,200.00 3 Total $741,200.00 Direct labor hours were estimated as follows: Fabrication Department4,550hours Assembly Department 5,400 Total 9,950hours In addition, the direct labor hours (dlh) used to produce a unit of each product in each department were determined from engineering r ...
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