Chapter 7 BEX 7.04

Sequential (Step) Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and to producing departments Fabricating and Assembly Support Departments Producing Departments General Human Resources Factory Fabricating Assembly Direct costs $150,000 $360,000 $120,000 $86,000 Normal activity: : Number of employees 50 45 80 Square footage 1,500 6,000 14,000 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The , support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "O". Use the rounded values for subsequent calculations. Human Resources Proportion of Driver Used by General Factory Fabricating o 0.36 Assembly Human Resources o 0.64 General Factory 0.0698 D 0.2791 0.6512 2. Using the sequential method, allocate the costs of the Human Resources and General Fectury depertments to the Fabricating and Assernbiy departments. If an amount is zero, enter"O". Round your answers to the nearest dollar. Support Departments Producing Departments Human Resources General Factory Fabricating Assembly Direct costs 150,000 $360,000 120,000 86,000 Allocate: General Factory 25,116 X -360,000 X -360,000 X -360,000 X Human Resources Total after allocation Fecha