Refer to Exercise 5-24 for data. Now assume that Dexter Company uses the sequential method to allocate
Question:
Refer to Exercise 5-24 for data. Now assume that Dexter Company uses the sequential method to allocate support department costs to the producing departments. Human resources is allocated first in the sequential method for Dexter.
Required:
1. Calculate the allocation ratios for power and human resources. (Carry these calculations out to three significant digits.)
2. Allocate the support service costs to the producing departments.
3. Assume departmental overhead rates are based on direct labour hours. Calculate the over- head rate for the battery division and for the small motors division (round overhead rates to the nearest cent).
4. What is the difference between the direct method and the sequential method of allocating support centre costs? W
Step by Step Answer:
Cornerstones of Managerial Accounting
ISBN: 978-0176530884
2nd Canadian edition
Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman