Support Departments General Factory Operating Divisions Power Battery Small Motors Overhead costs $160,000 $430,000 $163,000 $84,600 Machine hours 2,000 2,000 7.000 1,000 Square footage 1,000 1,500 5,000 15,000 Direct labor hours 18,000 60,000
Sequential Method of Support Department Cost
Allocation
Refer to Exercise 4-51 for data. Now assume that Stevenson uses the sequential method to allocate support department costs to the operating divisions. General Factory is allocated first in
the sequential method for the company.
Required:
1. Calculate the allocation ratios for Power and General Factory. (Note: Carry these
calculations out to four decimal places.)
2. Allocate the support service costs to the operating divisions. (Note: Round all amounts to
the nearest dollar.)
3. Assume divisional
rate for the Battery Division and for the Small Motors Division. (Note: Round overhead
rates to the nearest cent.)
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