$($Appendix $4$B$)$ Sequential Method of Support Department Cost Allocation

Stevenson Company is divided into two operating divisions: Battery and Small Motors. The company allocates power and general factory costs to each operating division using the sequential method. General Factory is allocated first in the sequential method for the company. Support department cost allocations using the sequential method are based on the following data:

Support Departments Operating Divisions

Power General Factory

Battery Small Motors

Overhead costs $$160,000$ $$430,000$ $$163,000$ $$84,600$

Machine hours $2,0002,0007,0001,500$

Square footage $1,0001,5007,50020,000$

Direct labor hours $18,00060,000$

Required:

$1.$ Calculate the allocation ratios for Power and General Factory. $($Note: Carry these calculations out to four decimal places.$)$

Allocation ratios for General Factory

Power fill in the blank $1$

Battery fill in the blank $2$

Small Motors fill in the blank $3$

Allocation ratios for Power

Battery fill in the blank $4$

Small Motors fill in the blank $5$

$2.$ Allocate the support service costs to the operating divisions. Round all amounts to the nearest dollar. Use a minus sign to indicate a subtraction. For those boxes in which no entry is required, leave the box blank or enter zero $("0").$

Support Departments Operating Divisions

Power

General Factory

Battery Small

Motors

Direct costs $fill in the blank $6$

$fill in the blank $7$

$fill in the blank $8$

$fill in the blank $9$

Allocate:

General Factory fill in the blank $10$

fill in the blank $11$

fill in the blank $12$

fill in the blank $13$

Power fill in the blank $14$

fill in the blank $15$

fill in the blank $16$

fill in the blank $17$

Total $fill in the blank $18$

$fill in the blank $19$

$fill in the blank $20$

$fill in the blank $21$

$3.$ Assume divisional overhead rates are based on direct labor hours. Calculate the overhead rate for the Battery Division and for the Small Motors Division. Round overhead rates to the nearest cent.

Battery overhead rate $fill in the blank $22$

Small Motors overhead rate $fill in the blank $23$