(Appendix 4B) 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 Battery Small Motors General Factory $430,000 Overhead costs $160,000 $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 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 0.0476 Battery 0.2381 Small Motors 0.7143 Allocation ratios for Power Battery 0.875 X Small Motors 0.125 X 2. Allocate the support service a . sts 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 ente zero ("0"). Support Departments Operating Divisions Small Power General Factory Battery Motors Direct 160,000 430,000 163,000 $ 84,600 costs Allocate: Power 20,468 -430,000 102,383 307,149 General -180,468 0 221,895 X 41,426 X Factory Total 0 0 487,278 X $ 350,323 x 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 $ 9.06 X Small Motors overhead rate $ 1.41 X