chap 7 bex

BEX.07.04

Sequential (Stan) Method of Support Department Cast Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly Support Departments Producing Departments Human General Resources Factory Fabricating Assembly Direct costs $150,000 $360,000 $120,900 $86,000 Normal activity Number of employees 60 45 00 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. Proportion of Driver Used by Human Resources Fabricating Assembly General Factory 0 Human Resources o 0.36 0.64 General Factory 0.0698 0 0.2791 0.6512 2. Using the sequential method, alocate the costs of the Human Resources and General Factory departments to the Fabricating and Assernbly depertments. If an amount is zero, enter"O". Round your answers to the nearest dollar. Support Departments Producing Departments Fabricating Assembly Human Resources 150,000 General Factory 360,000 Direct costs $120,900 $86,000 / Allocate: General Factory 25,128 -360,000 x 100,476 234,432 Human Resources -175,128 07 o 63,046 112,082 Total after allocation O O X 284,422 $432,514