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ix) 4-37 Sequential allocation Carleton Company has two service departments and two production departments. Information on annual manufacturing overhead costs and cost drivers follows: ITEM
ix) 4-37 Sequential allocation Carleton Company has two service departments and two production departments. Information on annual manufacturing overhead costs and cost drivers follows: ITEM Overhead costs Direct labor hours Number of square feet SERVICE DEPARTMENTS PRODUCTION DEPARTMENTS S1 S2 Pl P2 $65,000 $55,000 $160,000 $240,000 2,000 1,500 2,000 3,000 800 1,200 2,400 2,600 The company allocates service department costs using the sequential method. First, S1 costs are allocated on the basis of direct labor hours. Next, S2 costs are allocated on the basis of square footage. The square footage for Sl is assumed to be zero for this purpose. Determine the total overhead costs allocated to each of the two production departments. 4-38 Direct aanantial
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