Refer to the data in Exercise 7-20. The company has decided to use the sequential method of allocation instead of the direct method. The support departments are ranked in order of highest cost to lowest cost.

Required:

1. Allocate the overhead costs to the producing departments using the sequential method. (Take allocation ratios out to four significant digits.)

2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent.)

LO1